SBI removes ‘fraud’ tag from Religare Finvest account after Delhi HC order

Bengaluru: The State Bank of India has formally removed the ‘fraud’ label attached to Religare Finvest Limited (RFL) under the Central Fraud Registry Database, following a December 18 Delhi High Court order.

The Central Fraud Registry is a web-based database on frauds reported by commercial banks and select financial institutions.

The official communication from SBI, a key lender to RFL, was received on January 25, the company said. In March, 2023, RFL completed a one-time settlement with 16 lenders through organic collections, amounting to over Rs 9000 crore.

RFL, a wholly-owned subsidiary of Religare Enterprises Limited, now awaits lifting of the corrective action plan imposed on RFL by the Reserve Bank in January, 2018, following large-scale siphoning of funds from RFL and REL.

“The removal of the ‘fraud’ tag stands as a testament to the commitment and dedication of the company’s board, management and employees in resurrecting RFL and the Group from the brink in the aftermath of fraud perpetrated by the erstwhile promoters and their affiliates and putting it on the path of growth and development,” company Executive Chairperson Dr Rashmi Saluja said.

Religare’s former promoters Malvinder Singh and Shivinder Mohan Singh were charged with diversion of funds through Religare Finvest between 2014-2017, following which they lost control of the company in 2018. Saluja took charge in 2020 after the board of Religare Enterprises was reconstituted.

The saga of troubles for the company however did not end there. The company’s board has been entangled in a months-long tussle with Dabur’s Burman family - the largest shareholder in Religare Enterprises - who sought to pick up an additional 26% stake in Religare last year. The company’s board, led by Saluja, are fighting to stave off the takeover bid. 

The Competition Commission of India earlier this week gave its nod to the acquisition of 5.27% stake in Religare Enterprises by entities linked to the Burman family.

Speaking on the removal of the fraud tag, RFL Chief Executive Officer Pankaj Sharma said: “The announcement holds great significance for the company, as it will open doors for our strategic path towards achieving growth.”