SEBI in Religare Finvest Case Directs Attachments of Bank and DEMAT Accounts of Shivi Holdings

SEBI in Religare Finvest Case Directs Attachments of Bank and DEMAT Accounts of Shivi Holdings

The market regulator Securities Exchange Board of India (in short SEBI) directed the attachment of bank and DEMAT accounts of Shivi Holdings to recover Rs. 5.35 crore in a matter related to fund diversion case of Religare Finvest. Religare Finvest Ltd (in short RFL) is a subsidiary of Religare Enterprises Ltd (in short REL).

The present case is related to the diversion of funds amounting to Rs. 2,473.66 crore of Religare Finvest Ltd, a subsidiary of Religare Enterprises Ltd, during the Financial Year 2014-2015 till Financial Year 2017-18, in the form of loans through different entities to gain ultimate benefits of entities controlled by the erstwhile promoters- Singh brothers.

SEBI found that these diverted funds never came back to RFL. The diversion of funds was never disclosed to the shareholders of REL, which deluded them to remain invested in the shares of REL or deal in the securities of REL. Thus, the alleged diversion of funds led to indirect manipulation of the price of shares of REL, SEBI stated in its order.

By indulging in such acts, they contravened the provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

The SEBI in its attachment order-initiated recovery proceedings against Shivi Holdings to recover Rs. 5.35 crore, which includes interests, all costs, charges, and expenses etc. SEBI in its notice requested all banks, depositories, and mutual funds not to allow any debit from the accounts of Shivi Holdings. However, credits have been permitted.

Moreover, the market regulator ordered all banks to attach all accounts, including lockers, of all the defaulter. In January, 2023 SEBI directed banks and depositories to attach bank and DEMAT accounts of erstwhile promoters of Religare Enterprises- Shivinder Mohan Singh and four other companies in order to recover Rs. 32.10 crore in the same matter.

The companies are- Malav Holdings, RHC Holding, ANR Securities and Religare Corporate Services (presently known as Finserve Shared Services). They were also the former promoters of REL.