Security & Fraud

Indian Pharma Mogul Arrested For Fraud

One Singh brother has been arrested, while the other is still on the run. Indian pharma mogul Shivinder Singh was taken into custody in Delhi on charges of fraud and the misappropriation of funds. His brother Malvinder, however, remains at large.

The brothers have been accused of siphoning money from Fortis Healthcare, a large hospital chain in India, as well as diverting funds from the lending arm of Religare Enterprises Limited (REL) — which they founded, but eventually forfeited control of due to legal troubles. The brothers have both denied all the fraud allegations against them.

“The alleged persons, having absolute control on [REL] and its subsidiaries, put Religare Finvest Limited (RFL) in poor financial condition by way of disbursing the loans to the companies having no financial standing, and controlled by the alleged persons,” according to a police statement. In addition, “these companies willfully defaulted in repayments, and caused wrongful loss to RFL to the tune of Rs2,397 crores [($338 million USD)].”

Moreover, “the alleged persons systematically siphoned off and diverted money of [the] general public in a clandestine manner for their own benefit. Further investigation of the case is in progress,” said Financial Times.

The brothers oversaw the massive $4.7 billion sale of drugs company Ranbaxy to Japan’s Daiichi Sankyo in 2008 — the biggest foreign acquisition of an Indian company. However, the United States soon imposed sanctions on Ranbaxy for violating quality standards, and the Singh brothers were fined Rs35 billion for withholding information during the deal.

The relationship between the brothers soured as their legal troubles grew. While Shivinder was persuaded by their mother to drop a case against his brother, accusing him of “oppression and mismanagement,” Malvinder wound up filing a criminal complaint a few months later, accusing Shivinder of diverting funds to a guru in charge of one of the country’s spiritual sects.

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