RFL scam: Fortis ex-promoter Malvinder Singh sent to ED custody till Nov 28

The Delhi High Court Wednesday allowed the Enforcement Directorate to conduct custodial interrogation till Thursday of former Fortis Healthcare promoter Malvinder Singh and another co-accused to confront them with voluminous documents and several witnesses in a money laundering case related to alleged misappropriation of funds at Religare Finvest Ltd (RFL).

Besides Malvinder, the court also remanded Sunil Godhwani, former CMD of Religare Enterprises Ltd (REL), to ED's custody till November 28.

Justice Chander Shekhar set aside the trial court's November 23 order refusing to extend the ED custody of Singh and Godhwani and had remanded to judicial custody till December 7.

The agency had taken both into custody on November 14 from Tihar jail, where they had been lodged in a case filed by the Delhi Police in relation to the alleged scam.

Malvinder and Godhwani have been accused of laundering money, punishable under Sections 3 and 4 of the Prevention of Money Laundering Act.

Religare Enterprises to sell home loan arm, NBFC business to TCG

Purnendu Chatterjee-owned The Chatterjee Group (TCG) Advisory Services has entered into an agreement with Religare Enterprises to acquire its NBFC arm Religare Finvest (RFL) and housing finance company Religare Housing Development Finance Corporation (RHDFC).

SBI Capital Markets acted as an advisor in the whole transaction. RFL has liabilities of Rs 5,800 crore, which are being restructured by a group of lenders, headed by State Bank of India (SBI).

In a filing to the stock exchanges, Religare Enterprises said it would divest its entire stake in RFL to TCG Services or any of its affiliates. This means TCG will gain control of the housing finance company RHDFC, a subsidiary of RFL.

Lenders to RFL have already signed the inter-creditor agreement under the revised guidelines of the Reserve Bank of India for stressed assets. Lenders expect the restructuring of loans to be completed by August 2019. A total of 22 lenders are part of the group, which had extended credit to the NBFC.

Sanjay Palve, chief executive officer of RFL and RHDFC, said: “This comes as a significant development for the Religare Group, which not only enhances value for its shareholders, with improved focus on its other businesses, but also strengthens RFL and RHDFC’s businesses by aiding implementation of the ongoing debt resolution process in RFL, and providing necessary support to boost future growth of the businesses.”

The company, on the other hand, is seeking more time to make repayments for its liabilities. “The new promoter of the company (TCG Advisory Group) is expected to infuse Rs 300-350 crore in the struggling firm. Also, since the company is seeing a change in management, with Religare exiting the company completely, the restructured loans will be treated as standard assets,” Palve said.

RFL has an asset base of Rs 7,000 crore, which includes Rs 4,500-crore SME loan book. RHDFC has a loan book of Rs 725 crore, with liabilities of Rs 500 crore and capital base of Rs 200 crore. “We are confident that through this transaction we will be able to capitalise both RFL and RHDFC to achieve growth in the high-potential SME and affordable housing sectors,” Palve added.

According to the filing, RFL posted a total revenue of Rs 795 crore in FY19 and its net worth was to the tune of Rs 946 crore. RHDFC reported a total revenue of Rs 130 crore in 2018-19 and its net worth was Rs 196 crore.

After the announcement, Religare Enterprises closed 10 per cent higher at Rs 42.95 on the BSE.