Religare Enterprises, Religare Finvest regulate Sebi case; pay Rs 10.5 cr

Religare Enterprises and Religare Finvest on Tuesday settled a case with market regulator Sebi regarding alleged financial mismanagement and diversion of funds after they collectively paid Rs 10.5 crore for settlement costs.

Individually, Religare Enterprises Ltd (REL) and Religare Finvest Ltd (RFL) paid Rs 5.42 crore and Rs 5.08 crore respectively for settlement amount, said the Securities and Exchange Board of India (Sebi) in a settlement order.

The order came after the two companies filed an application with Sebi proposing to settle regulatory violations “without admitting or denying the findings” through a settlement order.

“The enforcing enforcement procedures for the alleged standard …

Sebi had received complaints about financial mismanagement and diversion of funds especially in RFL, a subsidiary of REL which is a listed company, for the benefit of the promoters / promoter group companies.

Subsequently, the supervisor conducted an investigation which found that RFL was part of a fraudulent and misleading scheme and acted in a fraudulent manner which led to diversion of funds for the tune of Rs 2,473.66 crore through a tangible subsidiary of REL for the ultimate benefit of promoters, note the order.

Furthermore, it was found that REL’s consolidated financial statements were not true and fair and misleading to the shareholders of the listed company. It was also noted that despite repeated adverse observations by the Reserve Bank of India (RBI) regarding RFL’s corporate loan book, REL did not disclose the same to the stock exchange until 2017, it added.

As a result, the regulator initiated proceedings against the entities and issued a notice in November 2020 for violating PFUTP (Prohibition of Fraudulent and Unfair Commercial Practices) and LODR (Requirements for Obligations and Disclosure of Licenses).

Pending enforcement proceedings, the two companies proposed to settle the matter upon payment of settlement amounts.

Subsequently, the Sebi Commission recommended the case for settlement on payment of compensation.

(Only the headline and image of this report may have been re-edited by Business Standard staff; the rest of the content will be automatically generated from a syndicated feed.)

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that interest you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how you can improve our offering have only made our decisions and commitment to these ideals stronger. Even in these difficult times coming out of Covid-19, we continue to strive to keep you up to date and up to date with credible news, authoritative opinions and sharp comments on current affairs of relevance.
However, we have a request.

While we are fighting the economic consequences of the pandemic, we need your support even more so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, honest and trustworthy journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard,

Digital editor

Notice: ob_end_flush(): failed to send buffer of zlib output compression (0) in /home/rvpgmedi/public_html/wp-includes/functions.php on line 5275