NEW DELHI: Capital markets regulator Sebi has issued notices to 11 entities asking them to pay Rs 6 crore within 15 days in a case concerning diversion of funds of Religare Finvest, an arm of
In addition, the regulator warned of attachment of assets and accounts if they fail to make the
within the stipulated time.
The 11 entities that received notices are —
, Ad Advertising, Zolton Properties, Saubhagya Buildcon, Star Artworks, Vitoba Realtors, Devera Developers and Harpal Singh.
The demand notices came after the entities failed to pay the fine imposed on them by the Securities and Exchange Board of India (Sebi) in October 2022.
The regulator has issued notices to seven entities on Monday and four remaining on Tuesday and directed them to pay a little over Rs 6 crore, which includes interest and recovery cost, within 15 days.
In the event of non-payment of dues, the regulator will recover the amount by attaching and selling their moveable and immovable properties. Besides, the entities will face attachment of their bank accounts.
Also, the regulator takes the route of arrest and detention in prison to recover the amount.
In October 2022, Sebi imposed penalties totalling Rs 21 crore on 52 entities, including these 11 entities, for huge diversion and misutilisation of funds of Religare Finvest. In this case, the regulator levied a fine ranging Rs 20 lakh to Rs 85 lakh on these entities.
The case involved a complex web of transactions whereby the funds of listed company Religare Enterprises Ltd (REL) were diverted through its subsidiary Religare Finvest Ltd (RFL) for the ultimate benefit of the erstwhile promoters — RHC Holding, Malvinder Mohan Singh and Shivinder Mohan Singh. Funds were also misutilised for repayment of earlier loans taken from RFL.
As per the order, the whole scheme of fraud led to the diversion of funds of Rs 2,473.66 crore out of a material subsidiary of REL, a listed company and also misutilisation of funds of Rs 487.92 crore of RFL.