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    Delhi High Court summons Singhs over Fortis’ claim for dues

    Synopsis

    Former Ranbaxy promoters allegedly routed money through companies related to them.

    ET Bureau
    NEW DELHI: The Delhi High Court has summoned Malvinder and Shivinder Singh after Fortis Healthcare Ltd filed a petition for recovery of dues allegedly siphoned off by the former promoters of Ranbaxy.

    The September 3 court order has asked the brothers to file a written statement within 30 days, which shall not be later than 120 days.

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    The next hearing is scheduled for October 22. The Singh brothers need “to appear in the court in person or by a pledger duly instructed and able to answer all material questions relating to the suit,” it said.

    An investigation into the accounts of Fortis by law firm Luthra and Luthra had concluded “systematic lapses” and “override of controls” in certain inter-corporate deposits (ICDs) used by borrowers to grant or repay loans to entities whose directors were connected to the Singhs.

    In June 2018, the newly constituted Fortis board under chairman Ravi Rajagopal released the findings by Luthra and Luthra which, according to Fortis, revealed that the management’s objections in these loans were “overruled”.

    Fortis had been giving loans to related parties through ICDs since 2011 and these were repaid till 2016. The approvals for ICDs were sought for investments into entities like Best Healthcare and Fern Healthcare.

    The recipients, however, defaulted on payments. Apart from the promoter duo, legal action has been initiated against RHC Holdings, Shivi Holdings, Malav Holdings, Religare Finvest, Best Healthcare, Fern healthcare and Modland Wears.

    Market regulator Sebi, too, had found that money had gone to entities related to the Singh brothers. “The Sebi investigation had revealed that the loan amounts were repeatedly routed through these companies for the ultimate benefit of the former promoters,” reads the Fortis suit. ET has seen a copy of the suit. Observing that Fortis issued secured inter-corporate loans to these entities, Sebi had passed an order on October 17 last year, asking Fortis to take necessary action to recover Rs 403 crore with due interest from the former promoters and various promoter companies within 90 days.

    In its February 13 petition, Fortis had asked Sebi to invoke the law under which a person can be arrested and held in prison after the Singh brothers failed to return the diverted money as was directed by the regulator. A suit filed in August by Fortis was another step to push the former promoters and related companies pay back the money they owed the hospital chain.

    The summons issued to the Singhs add to their troubles as they face action for siphoning off money in a similar fashion from Religare Finvest, the lending arm of Religare Enterprises Ltd.

    Both the brothers, along with former REL chairman and managing director Sunil Godhwani, former Religare Finvest Ltd (RFL) chief executive Kavi Arora and former REL chief financial officer Anil Saxena are in police remand and will be produced in the court on Tuesday.

    People close to the Singh brothers said they were in touch with their legal team to file the response on the Fortis suit.


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