New Delhi: A Delhi district court on Friday sent businessmen Malvinder Singh and Shivinder Singh to four days in police custody for questioning in a case of alleged diversion of funds from Religare Finvest Ltd (RFL) to other companies controlled by them.
The brothers, former promoters of Ranbaxy Laboratories Ltd, were arrested across Thursday and Friday after RFL, an arm of Religare Enterprises Ltd (REL), alleged “wrongful loss" worth ₹2,397 crore.
Three others—former REL chairman and managing director Sunil Godhwani, along with Kavi Arora and Anil Saxena, who occupied important positions in REL and RFL—were sent to four-day custody of the economic offences wing (EOW) of the Delhi Police. The five men were produced before the chief metropolitan magistrate Deepak Sherawat at the Saket district court.
While Shivinder and the three others were arrested on Thursday, Malvinder was arrested early on Friday, hours after he was detained in Ludhiana. The Delhi Police said all the arrests were made under sections 409 (criminal breach of trust by a public servant, banker, merchant or agent) and 420 (cheating).
In the district court, the police argued for custodial interrogation, saying it needs to ascertain the role of co-conspirators. This, it said, can only be done if the accused are made to confront other executives.
Police said the case involves huge amounts of public money which have been diverted fraudulently and that interrogation is needed to track the funds. It said the money trail needs to be ascertained while the probe is in its early stages.
Malvinder’s counsel opposed the police custody, saying his client has always participated in the probe and never evaded any questions. He argued that the evidence with EOW is all documentary and that Malvinder has submitted an affidavit in the Delhi high court saying he does not have the money he is accused of misappropriating.
In an interesting turn of events, Malvinder’s younger brother Shivinder appeared for himself. Submitting that he was a victim of fraud, he said he does not want to oppose police custody and that he will provide full cooperation in the investigations.
Malvinder, through his counsel Abhishek Manu Singhvi, argued in the Delhi high court for quashing the first information report (FIR) registered against him.
The writ petition filed for quashing of the FIR challenges the jurisdiction of EOW to register the FIR on the complaint of RFL, which alleged siphoning of funds by the accused from REL and its subsidiary companies including RFL, through fraudulent unsecured loans to shell companies and promoter-owned companies.
“If both EOW and SFIO (Serious Fraud Investigation Office) continue to investigate the same offence arising out of the same transaction, it would violate the principle of double jeopardy," Singhvi submitted.
He sought a notice to be issued to EOW for grant of stay on the proceedings initiated by EOW. Singhvi also contended that only SFIO, which comes under the ministry of corporate affairs, could have investigated the allegations of fraud and cheating against Malvinder.
EOW and RFL opposed the petition, while Malvinder urged the court to issue notice in the matter and stay the proceedings initiated by the police.
The Delhi high court reserved its order on whether to issue notice on Malvinder’s plea to quash the FIR.