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MARKET INTEL by PharmaCompass
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By PharmaCompass
2019-02-21
Impressions: 74 Article
The case involving the Singh brothers (Malvinder and Shivinder Singh), former promoters of Ranbaxy Laboratories, has turned murkier as India’s Serious Fraud Investigation Office (SFIO) said the alleged funds diversion at Fortis Healthcare (another group company they promoted) could add up to more than US$ 282 million (₹20 billion).
These facts emerged from the complaint filed by Malvinder Singh with the Economic Offenses Wing in Delhi and from the findings of SFIO. Malvinder has also alleged that Shivinder, the spiritual head of the Radha Soami Satsang Gurinder Singh Dhillon and others have also threatened to kill him.
According to Malvinder, Dhillon has threatened him that if he does not agree to Dhillon’s demands, he would be eliminated by persons from the Satsang. Malvinder says he has recordings of death threats to sign agreement absolving Baba.
The Securities and Exchange Board of India (SEBI) also suspects the total size of the fraud could be much higher than the US$ 56.75 million (₹4 billion) it originally estimated.
SEBI has already passed an order against Fortis to recover US$ 70.41 million (₹5 billion) from the Singh brothers for funds diverted to the promoter and promoter-related entities in December.
The compliant points to a series of transactions between RHC Holding Private Limited, the holding company promoted by the brothers wherein RHC extended loans worth US$ 772.66 million (₹54.82 billion) to members of the Dhillon family, their associates or entities controlled by them.
In the complaint, Malvinder claims Shivinder connived with Dhillon to sell these firms to RHC, thus putting more strain on the holding company. The companies were acquired without any legal due diligence, execution of agreements and any check on their businesses, he added.
The twist in the tale came when Dhillon sought to discharge himself from the said liabilities, asking the Singh brothers to sign a family settlement that would encompass no legal proceedings or criminality in any circumstance against him. According to the proposed settlement, Shivinder was offered a position to head the Radha Soami Satsang Beas sect. In return, the Singh brothers were to write off these loans as bad debt.
While Shivinder agreed to the deal, Malvinder did not, the latter said in the complaint. A report published in Mint says Shivinder repeatedly reached out Dhillon to “resolve" financial matters.
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