New Delhi, Jan 17 (PTI) A Delhi court has framed criminal conspiracy and cheating charges against former Religare Enterprises Ltd promoters Malvinder Mohan Singh and his brother Shivinder Mohan Singh.

The Economic Offences Wing (EOW) of Delhi Police registered an FIR in March 2019 against the Singh brothers and others on a complaint from the parent company, Religare Finvest Limited (RFL), regarding funds' misappropriation.

Malvinder, his brother, and others were arrested by the EOW for allegedly diverting RFL's money and investing it in other companies.

In an order passed on December 16, the court said both accused allegedly siphoned off Rs 1,260 crore by committing fraud upon RFL from 2016 to 2018.

From the allegations, the court said it was clear both the accused persons being the promoters of REL and RFL controlled and influenced the functioning of RFL.

"Both accused in connivance with each other conspired together and from 2016 to 2018 by influencing the management of RFL through the management of REL siphoned off the funds from RFL in a labyrinth manner," it said.

The court considered the evidence, a SEBI report, and the statements of the witnesses cited by the prosecution and observed it was clear Malvinder and Shivinder in criminal conspiracy with each other and having dishonest intentions, gained wrongfully by transferring the funds to RHC Holdings (a promoter group company) through 19 entities (being the accused companies herein) by misusing their influence and caused wrongful loss to the complainant company (RFL).

"Therefore, both accused are liable to be charged for the offences under Sections 420 (cheating)/120 B (criminal conspiracy) of the Indian Penal Code," the court held.

In its 229-page order, the court took note of the allegations that both the accused caused RFL to provide unsecured and high-value loans to shell companies and other related or known entities.

"Thus, as and when and pursuant to the instructions received from either accused or their agents/nominees/associates, sums to the tune of hundreds of crores were disbursed by RFL at very short notice and at times without adequate documentation for the same (in many instances the documentation was created only subsequently)," it said.

The court further said it was evident from the conduct of the entities, which had received the purported loans that they never intended to repay them.

"In view of the aforesaid allegations, it is made out that both accused number 1 and 2 in conspiracy with each other created the corporate loan book since the beginning of RFL business primarily for utilizing funds at their disposal," the court said.

The ED registered a case on September 24, 2019, against Malvinder under the Prevention of Money Laundering Act in connection with the scheduled offences of cheating and criminal conspiracy under the IPC. PTI MNR AMK

Criminal conspiracy and cheating: promoters accused of diverting company funds through related entities, prompting parallel probes. Charges were framed alleging that the promoters conspired to divert funds by influencing the parent lending company to make unsecured loans to related or shell entities, using a network of promoter-linked companies and hindsight documentation; the court found investigative reports and witness statements supported a conclusion of a common dishonest design constituting criminal conspiracy and cheating, and separate money laundering proceedings were initiated in connection with those alleged scheduled offences.