A day after it stated that the Economic Offences Wing, Delhi registered a First Information Report (FIR) against the lender and its board members, Lakshmi Vilas Bank (LVB) alleged that Religare Finvest Limited (RFL) was attempting to mislead the public to cover up a massive fraud by its own promoters, employees and group companies.
The bank said it would cooperate with the investigating agencies and regulatory authorities in order to expose RFL's attempt to cover up the fraud.
The FIR, filed against the directors of LVB and other parties under the Indian Penal Code, was based on a complaint by RFL that its deposits had been adjusted in order to clear the dues of RHC Holding Pvt Ltd and Ranchem Pvt Ltd.
In a filing on May 16, RFL had said, "The new management discovered that one of the major reasons for RFS's terrible financial condition was the misappropriation by LVB of monies due to RFL on account of four fixed deposits placed by it with LVB amounting to approximately Rs 791 crore (including interest accrued on Rs 750 crore of principal amount). Such misappropriation had caused a massive unlawful loss to RFL and consequently to all its shareholders including the public shareholders."
LVB said that during 2017-18, it had adjusted deposit loans aggregating to Rs 794 crore, extended to RHC Holding Private Limited and Ranchem Private Limited, group companies of Religare Finvest Limited (RFL) against RFL's deposits.
Taking exception to this adjustment, RFL filed a suit against LVB in May 2018 in Delhi High Court. RFL had also filed an interim application in the suit claiming attachment of the assets of the bank, its employees, directors and other parties.
LVB claims that the application was heard for more than a year and when it was reserved for orders, RFL made a submission to the court for withdrawing it for "reasons best known to them". Till date, no adverse orders have been passed against the lender by any judicial forum.
The hearing in the case slated for yesterday has been adjourned to October 30.
"Now, as a desperate measure, RFL has filed a complaint with EOW, Delhi, which has registered an FIR against the bank, its directors and other unknown persons alleging the
very same issues," said S Sundar, Chief Financial Officer, LVB, in a statement.
He added that mere registration of FIR does not mean anything at this stage. He said the bank was committed to cooperating with the investigating agencies and regulatory authorities in order to bring out the alleged attempts of RFL to mislead the public and cover up a massive fraud to which its own promoters, employees and group companies were party.
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