Religare fraud: Money siphoned to foreign companies, ED tells Court

Probing the alleged misappropriation of funds of Religare Finvest Ltd (RFL), the Enforcement Directorate (ED) has alleged that money was siphoned off to “foreign companies”.

The agency on Saturday sought five more days of custodial interrogation of Malvinder Singh, erstwhile promoter of Religare Enterprises Limited (REL).

Seeking further remand the agency told a local Court that the money allegedly laundered by the accused has been “founded to be linked with foreign companies”.

Agency’s special public prosecutor Nitesh Rana sought further remand arguing that Malvinder has remained evasive during custodial interrogation and that the agency has found fresh evidence which requires further interrogation of Malvinder.

ED in its remand paper, accessed by ET, said that “the money trail which is found during interrogation is required to be confronted and further investigated”. The agency also told the Court that it has recovered voluminous “email dump” of accused and “key management persons” which is being looked into. The agency claimed that emails has data connected with proceeds of crime which is under scrutiny.

The remand paper says that the agency has summoned Directors of two companies where the “proceeds of crime” were allegedly parked by the accused. Besides the two Directors, three other individuals have been summoned, ED said.

It added that ED has sought documents from other agencies pertaining to probe against Malvinder and co-accused. ED said that Malvinder has remained evasive and non-cooperative during interrogation.

Strongly opposing ED’s demand, Malvinder’s lawyer Manu Sharma averred that ED has remained completely “opaque” and failed to comply with legal provisions relating to procedure of arrest and registration of FIR after Malvinder Singh was arrested.

Sharma further contended that Malvinder had already joined the investigation twice in the past after the agency raided his premises in August this year. Sharma said that ED has failed to share any specific details in its remand paper as to when it recorded the statement of any witness or procured fresh evidence.

Sharma said that the agency continues to play and hide and seek with accused. Taking stock of contentions, the Court refused to grant further police custody of Malvinder Singh and remanded him to judicial custody (Tihar).

The Enforcement agency, on November 14, had arrested Malvinder over charges of misappropriation of funds in Religare Finvest.

Malvinder Mohan Singh and his brother Shivinder Mohan Singh, the erstwhile promoters of Religare Enterprises Limited (REL), are facing charges of cheating, criminal conspiracy and criminal breach of trust. EOW had picked up the two and Godhwani last month and quizzed in police custody.

The case, which was registered on the complaint of a senior Religare manager, also named NK Ghoshal, a stockbroker and an associate of the Singh brothers. It was alleged that the company and its subsidiary Religare Finvest Limited (RFL) were cheated and properties worth “hundreds of crores have been misappropriated, siphoned off and diverted through a labyrinth of financial transactions”. The Singh brothers had, in collusion with the co-accused, “orchestrated the financial scam in or around 2016 ”, the complaint said.

It accused the Singhs of hatching “a well thought out and organised criminal conspiracy by which a financial scam of huge magnitude has been effected (sic).” The complainant has sought tracing and restitution of its properties. The Singh brothers served as promoters of REL till February 2018 and they “exercised deep and pervasive control over the management of RFL” since it was a subsidiary.

They lost complete control over REL and its subsidiaries, including RFL, following invocation of shares pledged by them and other promoter entities with various banks in February. Pursuant to reconstitution, the board of directors consists of professionals, widely recognised in their respective fields, who are unconnected to the promoters, the complaint said.

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