Religare appoints agency to investigate fund diversion

“Pursuant to the terms agreed with respect to the recovery proceeds of CLB portfolio and FDs… (from) Lakshmi Vilas Bank (LVB) (now DBS), under the Upside Sharing Agreement signed by RFL with the lenders, it is imperative for RFL to keep pursuing recovery of the siphoned off funds,” Religare said in a stock exchange filing.

“Accordingly, to aid RFL to recover such funds, RFL has commissioned the investigation,” Religare said.

The company was put under Corrective Action Plan (CAP) by the Reserve Bank of India (RBI) in January 2018. The company also completed its one-time settlement (OTS) with its 17 lenders in March 2023 using organic collections.

As part of the Upside Sharing Agreement with its lenders, RFL has to share the proceeds of recovery from two of its non-core assets viz. corporate loan book (CLB) and fixed deposit with Laxmi Vilas Bank (now DBS) with its lenders as and when, and if recovered.

“In pursuit of the same and with its sincere intention to recover monies from the non-core assets, RFL has now engaged with the services of an expert agency to conduct forensic investigation to establish trail of funds siphoned off through various non-core assets,” said a source.

The Competition Commission of India and market regulator SEBI have reportedly sought details from Religare about the role of the Burman family, promoters of Dabur, in the company and its open offer plans.

The Burmans own around 22 per cent stake in Religare and also announced an open offer to buy an additional 26 per cent stake. This is being stoutly opposed by the current management of Religare.