Former Ranbaxy Laboratories CEO and chairman Malvinder Singh on Friday moved the high court seeking the rejecting of the case registered by the Economic Offences Wing (EOW) against Religare Finvest Limited (RFL).
In his plea, Malvinder Singh, who was arrested on Thursday, claimed that EOW doesn't have jurisdiction and that he can only be tried under the companies law by Serious Fraud Investigation Office (SFIO) as of now.
Malvinder Singh had earlier moved an anticipatory bail. Now, after his arrest, Singh is seeking cancelling of the EOW FIR on grounds of jurisdiction.
Malvinder Singh was arrested by the Economic Offenses Wing (EOW) of the Delhi Police on Thursday after a lookout circular was issued against him.
Malvinder was arrested hours after his brother and former promoter of Religare Enterprises Shivinder Singh was held in connection with an allegedly misappropriating funds of Religare Finvest Limited (RFL) to the tune of Rs 2,397 crore.
Sunil Godhwani (58), the former Chairman and Managing Director of Religare Enterprises Limited (REL), Kavi Arora (48) and Anil Saxena, who also occupied important positions in REL and RFL, were also arrested by the Economic Offences Wing (EOW) of Delhi Police for allegedly diverting money and investing in other companies, they said.
RFL is a subsidiary of the REL. Shivinder and his elder brother Malvinder were earlier the promoters of REL.
What is the EOW case
The EOW had registered an FIR in March after it received a complaint from Manpreet Singh Suri of the RFL against Shivinder, Godhwani and others alleging that loans were taken by him while managing that firm but the money was invested in other companies.
According to police, the complainant stated that the four were having absolute control on REL and its subsidiaries.
"They put RFL in poor financial condition by disbursing loans to companies having no financial standing and controlled by them. The companies to which loans were disbursed willfully defaulted in repayments and caused loss to RFL to the tune of Rs 2,397 crore," Additional Commissioner of Police (Economic Offences Wing) O P Mishra said.
This was also pointed out and flagged during an independent audit by Reserve Bank of India and Securities and Exchange Board of India (SEBI). "The alleged persons systematically siphoned and diverted money of general public in a clandestine manner for their own benefit," Mishra added.
Also Read: Economic Slowdown: Passenger vehicle sales decline by 24%, commercial by 62%
REL was controlled by the warring Singh brothers until February 2018. Post their exit from the board of REL, the boards of REL and RFL were re-constituted.
The relationship between the Singh brothers
The relationship between the Singh brothers, who were erstwhile promoters of Fortis and Ranbaxy, turned sour after allegations of fund diversion from the healthcare chain emerged apart from other charges of financial impropriety. The ties aggravated further overpayment of the arbitration award to Japanese drugmaker Daiichi Sankyo.
Shivinder had offered to pay his share of the Rs 3,500 crore award to Daiichi Sankyo in a dispute related to the acquisition of Ranbaxy Laboratories.
They sold Ranbaxy to Japanese firm Daiichi Sankyo in 2008 for around USD 4.6 billion.