The Singhs are famous for expanding their two public firms hospital operator Fortis Healthcare Ltd. and financial firm Religare Enterprises Ltd. at breakneck speed after reaping $2 billion from the Ranbaxy sale. The court had also asked Dhillon and his family members to be personally present in the court on November 14. The Singhs holding company also loaned at least 7 billion rupees to cover losses at a firm that had been spun out of Religare to manage the financial firms administrative costs. Download The Economic Times News App to get Daily Market Updates & Live Business News. Of that, Rs834 crore was due to write-offs arising out of losses from advances, goodwill and inter-corporate deposits and other provisions. The court, in its September order, said the amount which has 55 garnishees, including Dhillon family, owe to RHC Holdings should be deposited with the registrar general of the Delhi high court within 30 days. When the value of Ranbaxy was at its peak, the brothers sold their 33.5% stakes to the Japanese pharma giant Daiichi Sankyo group and got loaded with Rs 9,576 crore cash in hand from the deal in 2008. In an affidavit filed with the Delhi High Court dated November 12 and reviewed by The Indian Express, Dhillon admitted that the Singh brothers had in 2010, through RHC Holding (a company controlled by the brothers), approached him and his family to subscribe to a rights issue of REL that was not fully subscribed at that moment. Still, Dhillon hails from a family of major landowners in Punjab, and was himself a businessman in Spain prior to his ascension at the spiritual group. Prius Commercials website claims: "We own over two million square feet of commercial office space with another 1.5 million square feet in development and land capacity to develop a further 4.5 million square feet". Investment and routing of funds is a major bone of contention now and may be a precursor to a possible legal battle in the near future. For reprint rights: The Malvinder, Shivinder Singh story: Why the brothers, once billionaires, are in the dock, Supreme Court threatening to jail the brothers if they don't pay the tribunal award, Shivinder Singh sued Malvinder, accusing him of mismanagement, Sunil Godwani and a couple of other officials of Religare Enterprises Limited, Former Ranbaxy Laboratories CEO Malvinder Singh arrested in Ludhiana, Will see what needs to be done, says Meghalaya CM Conrad Sangma on alliance, Since 2005, have heard sentiments for reform, they havent materialised till date: EAM Jaishankar, PM Modi announces 'Start Up Bridge' between India, Italy, Govt bus driver climbs atop mobile tower to protest against conditions of buses, Early trends show BJP dominates in Tripura, Conrad Sangmas NPP leads in Meghalaya, BJP+ set to retain Tripura, Nagaland; Meghalaya heads towards hung assembly, Hathras rape-murder case: Court acquits 3, holds one guilty, SC directs Sebi to submit probe report in 2 months, sets up expert panel, BJP+ crosses majority mark in Tripura, says 'ready to accept all demands of Tipra Motha', Trends show NDPP-BJP alliance set to retain power in Nagaland, ahead in 39 seats, The Singh brothers used nearly Rs 2,000 crore to pay off taxes and loan repayments, Rs 1,750 crore and Rs 2,230 crore was invested respectively in Religare and Fortis, both companies founded by the brothers, The remaining Rs 2,700 crore was mysteriously transferred to one Gurinder Singh Dhillon and his family. Its 2007 IPO, which was offered at Rs185 per share, listed at a premium and even shot past Rs500 a share before the global financial bust in 2008. We believe in the India growth story. In 2016, a Singapore tribunal asked the Singh brothers to pay 2,600 crore to Daiichi Sankyo in a case involving Ranbaxy Laboratories' regulatory issues. The common point of Singh brother and Sunil Godhwani was RSSB. Asked what the Singh brothers would do for their Master, one person who knows the family answered in one word: Anything., (This story has been published from a wire agency feed without modifications to the text. They lost control of Religare in February 2018 once lenders invoked their shareholding against unpaid loans. In the last hearing of the case on August 10, the Delhi High Court froze all bank accounts of the brothers alleging they misled the courts. A statement from JC Sethi, secretary of Radha Soami Satsang Beas, said Dhillon played a role helping the Singhs assert control of their fathers businesses following his death, and in guiding them after. Another entity, Religare Corporate Services, fully owned by RHC Holdings, was set up in September 2011. head of Radha Soami Satsang Beas, his family members and Sunil Godhwani, the Satsangs funds manager, to make a killing through shares of Religare; the brothers sell 13.5 million shares at Rs 10 each before the IPO, though they were issued to the public at Rs 185 2008 Japans Daiichi-Sankyo buys out the Singh But by the time he delivered his first pravachan (discourse) at Beas in May 2017, Fortis was already a financial wreck. Such decimation of a flourishing and diversified empire within a decade is unprecedented in India's corporate history. From there it peaked to a consolidated revenue of Rs4,502 crore (March 2016), net profit of Rs320 crore (March 2015) and a marketcap of Rs6,762 crore (March 2011). The story of how they managed this is complex and has several gaps. But with the added liability, outside lenders to the brothers were reluctant to keep the taps open, even as the brothers offered up their family home and company shares as collateral. As a result, it was never returned! The Singhs owned a 51 percent stake in Lowe. In the slowdown-ravaged economy, the real estate sector had gone into a spiral by then and prices crashed. His group, the Radha Soami Satsang Beas, says it has more than 4 million followers worldwide. Malvinder and Shivinder Mohan Singh, the brothers (nephews of the guru) who founded Religare and transferred millions of shares in the company to the guru's sons also are RSSB initiates. At the heart of the allegations over which the Singh brothers have been arrested is a company that was once led by Malvinder and Shivinder -- Religare Enterprises Limited (REL). The Singhs say they didnt do anything illegal. He was backed by the Dhillons (who owned over 13 per cent of the company) to run Religare (earlier called Fortis Finance) in 2001. But that was not to be. Singh brothers Ranbaxy Gurinder Singh Dhillon India shabnam Radha Soami (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times .) That was also the beginning of flipping the international acquisition and expansion strategy to focus entirely on the Indian market starting 2012-13. The court also directed that the "55 parties shall not dispose of, alienate, encumber either directly or indirectly or otherwise part with the possession of any assets to the tune of the amount mentioned in the affidavit of July 30, 2019 except in the ordinary course of business such as payment of salary and statutory dues till the next date of hearing. The Dhillons were trapped and so were the brothers. The broad allegations are that Malvinder and Shivinder, along with other officials of REL, took loans in the name of RFL and diverted the money to other companies. Copyright 2023 Living Media India Limited. The Singhs finally had to pull out and sell their stake in Parkway also to Khazanah. Singhs now own a majority of this firm. The brothers ultimately lost the case and were ordered by a Singapore tribunal to pay $500 million (around Rs 3,500 crore at current rates). In July, 2017, ratings firm India Ratings & Research put Religare Enterprises, Religare Finvest and Religare Housing Development Finance on negative rating watch list. By its very nature, financial services business needs to raise debt to lend further. But before we get to that, let's understand the family dynamics between the Baba, Gurinder Singh Dhillon, the brothers and family confidante Sunil Naraindas Godhwani. At least some of these firms have gained notoriety ever since law firm Luthra & Luthra, which was hired to investigate a case of Rs473 crore being siphoned off from Fortis Healthcare, mentioned Fern, Modland and Best as the companies to whom the money was transferred, allegedly against management advice and without proper sanctions. Copyright HT Digital Streams Ltd. All rights reserved. "We have challenged the majority Arbitration Award in Singapore Courts and the hearing for the same has concluded. Malvinder and Shivinder have been accused of diverting the money of Religare Finvest Limited (RFL), an REL subsidiary. 19 (RHC) transferred Rs 219.5 crore each to GP (Gurpreet) and GK (Gurkirat), which was then used to subscribe to the rights issue, resulting in an allotment of 61,83,013 shares of REL to each of GP and GK. "We would now like to fight for our Justice and Prideand not for economics only," say the brothers in their response. Fair enough! Recipient companies raised further loans at 12-14 per cent interest to buy more real estate. In late 2018, Shivinder Singh sued Malvinder, accusing him of mismanagement and of basically being responsible for the downfall of the brothers' businesses. Pic courtesy - CNBC-TV18. Rahul Wadhwa was also a former Fortis employee. Funds were then disbursed to other companies controlled by the Dhillons. The matter is reserved for judgement. But Fortis went into a cash crunch. In 2008, when Ranbaxy was at its peak, Malvinder and Shivinder Singh sold their controlling stake to the Japanese pharma giant Daiichi Sankyo. The third figure in the Ranbaxy brothers' corporate battle is Gurinder Singh Dhillon, the head of Radha Soami Satsang Beas among the largest such communes in the world, with 20 mn followers in 90 countries, yet fiercely secretive. Of the remaining Rs7,500 crore, Rs1,750 crore were. Unfortunately, the adverse ruling by the Delhi High Court and the Hon'ble Supreme Court of India in the Daiichi Sankyo arbitration case, compounded the problems, resulting in severe liquidity pressures, which has triggered unanticipated defaults with banks and lenders. Who lost the money? Dhillon is a cousin of the Singhs mother, and he became a surrogate father to them after the death of their own in the late 1990s. Dhillon-better known as 'Babaji' or the 'Saint of Beas' is the spiritual guru of the Radha Soami Satsang Beas (RSSB). The Singh brothers' downfall drove a wedge between them. At least 16 at last count. The Ranbaxy sale earned the brothers a windfall amount of Rs 9,576 crore. But in the case of Malvinder and Shivinder Singh, the two Ranbaxy brothers and billionaire scions who ended up in jail, the narrative goes beyond a simplistic explanation. He emphasizes community service. I think hes a businessman in his mind first, and a guru second, said Brian Hines, an American who was a member of the sects U.S. community for 35 years and has visited Beas. the head of the Radha Soami Satsang. Charan Singhs daughter Nimmi Singh is Malvinder & Shivinders mother and wife of Late Parvinder Singh. The court, in its September order, said the amount which 55 garnishees, including Dhillon family, owe to RHC Holdings should be deposited with the Registrar General of the Delhi High Court within 30 days. Even the Singh family's holding companies, RHC Holding and Oscar Investments, have declared it as their address. Its total debt shot up nearly 16 times from Rs1,272 crore in 2008/09 right after the Ranbaxy deal to over Rs20,222 crore by the end of March 2016. Religare was now paying nine times the annual interest of Rs1,698 crore in 2017 as against Rs182 crore in 2008. The Singhs funded all these outlays to the gurus businesses and to their own ventures with borrowing. The Fortis acquisition deal by IHH requires buying out the RHT assets as well to eliminate the annual licence fee. Or, in Shivinder's apparent desire to emerge as the sect's next spiritual head, the brothers gave loans to further his chances of being backed by Dhillon to head the sect and its sprawling operations. The Singh brothers' only fallback option may have been funds given to Dhillon and associates. The Singhs resources were marshaled to help the Dhillon family build a real-estate empire. Two companies, Prius Real Estate Private Ltd. and Lowe Infra and Wellness Private Ltd., were set up by people close to the guru, and although partly hidden by layers of shell companies, the Dhillon family had ownership interests in both, people familiar with the matter said and filings show.Over the next two years, these firms together received about 20 billion rupees in zero-interest loans from the Singhs private holding company or its subsidiaries, according to the people and the documents. As they moved to settle their dues by selling assets in group companies, Daiichi Sankyo moved court to protect its interest by securing several injunctions preventing them from divesting their assets or equity. They say Godhwani was also in charge of their holding company, RHC Holding Pvt., and often took decisions without informing them. They sold the company for an estimated $ 4.6 billion. In an arbitration tribunal in Singapore, its new owner, Daiichi Sankyo, accused the Singhs of concealing the extent of its regulatory problems during the sale. Promoter holding in the two key companies, Fortis and Religare, which was 63 per cent and 72 per cent, fell to 0.6 per cent and 1.5 per cent, respectively. The religious sect head also states in his affidavit that in 2006, he had, on behalf of his sons, purchased REL shares worth Rs 12.50 crore. The proposed marriage, however, never went through as the two parted ways. According to a Business Today report, the money earned from the Ranbaxy sale was spent in four parts: Gurinder Singh Dhillon, popularly known as the Baba, is closely linked to the story of Malvinder and Shivinder Singh's downfall. 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