ED searches 9 offices in RFL money laundering probe, seizes incriminating documents

New Delhi: The Enforcement Directorate (ED) late on Friday conducted searches at nine locations, including the offices of Religare Finvest Ltd and RHC Holdings. These were part of an ongoing money laundering investigation involving the embezzlement of over 2,000 crore from Religare Finvest Ltd (RFL), people familiar with the development said on Saturday.

The searches, ED officials said, continued into the early hours of Saturday, with several incriminating documents recovered and large scale “proceeds of crime" identified. Religare, however, said that these raids were initiated following a complaint by the company itself. The company told the stock exchanges that ED officials “basis a complaint made by the present management of Religare Finvest Limited", and “pursuant to the ongoing investigation with respect to the corporate loan book, collected relevant information/documents on 5 January 2024, to expedite the investigation as per request made by RFL recently.

The information and documents as advised were provided/submitted to the officials of the authority." A company spokesperson added that Religare had requested the ED to expedite the investigations into misappropriated funds by former promoters Malvinder Mohan Singh, Shivinder Mohan Singh, and their associates.

"Multiple cases have been initiated towards the same and various agencies are investigating these transactions. In a recent request made by RFL, ED was requested to expedite the ongoing investigations. ED officials conducted searches at various locations yesterday i.e. on 5.1.2024 to collect evidence which may he helpful in tracing the proceeds of crime.

RFL has promised its lenders that they shall make all possible efforts to recover siphoned off funds and in line with the same, RFL has commissioned a forensic audit to trace assets/money trail," the spokesperson said. The ED has been investigating Religare since 2019, following a Delhi Police case.

The police had arrested Fortis Healthcare founders Shivinder Mohan Singh and Malvinder Mohan Singh, along with Sunil Godhwani, former CMD of Religare Enterprises. The ED had taken custody of them and filed a charge sheet in January 2020. Sharing details of raids on Friday, an officer said, “ED conducted searches at nine places in Delhi NCR in the case of siphoning off/diversion of huge funds amounting to a more than 2000 crore from Religare Finvest Limited".

The premises covered during the searches, this officer said, include the corporate offices of RFL, M3M India Holdings, RHC Holding Pvt Ltd, Hillgrow Infrastructure Pvt Ltd, Dion Global Solutions, Prius commercial and others, adding that only official premises were covered during the searches. “A number of incriminating documents including digital evidence were seized during the searches and large scale proceeds of crime generated out of criminal activities have been identified," he said.

The ED's 2020 charge sheet claimed that 2,036 crore, termed “proceeds of crimes", was transferred to 19 companies connected to the Singh brothers over eight years. In its primary ECIR (Enforcement Case Information Report), the equivalent of an FIR, the ED is probing an alleged loan fraud of 47,968 crore.

The agency alleges that of the total loans amounting to 47,968 crore given to 115 companies by Religare, 2,036.69 crore was siphoned off to 19 companies that defaulted. The funds were mostly used for the personal benefit of the Singh brothers, according to the charge sheet. HT had reported these facts exclusively in January 2020.

The ED has accused the Singh brothers of systematically evergreening loans, a practice where new loans were regularly issued to repay existing ones, preventing their classification as non performing assets (NPAs). It has been alleged that the brothers caused RFL to give unsecured, high value purported loans to their shell companies and related/known entities.

The loans were allegedly given by the employees and management of RFL under the directions of management team, led by Sunil Godhwani (ex CMD of Religare Enterprises Ltd). They were used to repay earlier loans taken by entities associated with promoters under the corporate loan book, systematically avoiding the categorization as NPAs.

Livemint tops charts as the fastest growing news website in the world to know more. Unlock a world of Benefits! From insightful newsletters to real time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away!.