Sebi has ordered the attachment of the bank and demat accounts of Shivinder Mohan Singh and four other businesses in order to recover Rs 32.10 crore relating to the Religare Finvest fund diversion case.
Religare Finvest Ltd (RFL) is a Religare Enterprises Ltd subsidiary (REL).
Shivinder Mohan Singh, Malav Holdings, RHC Holding, ANR Securities, and Religare Corporate Services (formerly known as Finserve Shared Services) face Rs 32.10 crore in recovery proceedings.
In an attachment order issued on Monday, the Securities and Exchange Board of India stated that the amount includes all interest, costs, fees, and expenses.
In its notice, Sebi instructed all banks, depositories, and mutual funds not to debit Singh, Malav Holdings, RHC Holdings, or ANR Securities’ accounts. However, credits were permitted.
In addition, the market regulator has instructed all banks to seize the accounts and lockers of all defaulters.
In a fund diversion case involving Religare Finvest, Sebi served warnings to different businesses, including the former promoters of Religare Enterprises, Malvinder Mohan Singh and Shivinder Mohan Singh, requiring them to pay Rs 48.15 crore within 15 days.
RHC Holding and Malav Holdings were also the original promoters of Religare, whereas RHC Holding was the sole owner of ANR Securities and Religare Corporate Services.
The agency also warned that assets and bank accounts could be attached if the payment was not made.
The warning was issued after the entities failed to pay the Sebi-imposed fee.
The case involves the diversion of Rs 2,473.66 crore of Religare Finvest Ltd (RFL), a subsidiary of Religare Enterprises Ltd (REL), disguised as loans through multiple layers of organisations for the ultimate benefit of entities controlled by the company’s former proprietors, the Singh brothers.
Sebi observed that the diverted cash was never returned to RFL.
The diversion of funds was never disclosed to REL’s shareholders, deceiving them into remaining invested in the company’s shares and trading its securities. Sebi stated in its order that the apparent diversion of money led to indirect manipulation of the share price of REL.
By engaging in such conduct, they breached PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations.
