Order of Revocation in the matter of Religare Enterprises

Order of Revocation in the matter of Religare Enterprises Limited

An order of Revocation has been passed with respect to 14 entities in the matter of Religare Enterprises Limited.

Herein, the Securities and Exchange Board of India (SEBI) had passed an ad interim ex-part order dated March 14, 2019 read with corrigendum dated April 18, 2019 (Interim Order) in the matter of Religare Enterprises Ltd. against various entities, including 16 Noticees for their prima facie involvement in diversion of funds amounting to Rs. 2315.09 Crores from the books of Religare Finvest Limited (RFL), a subsidiary of Religare Enterprises Limited (REL), for the utilization of promoters and promoter group entities of REL, in violation of the provisions of the SEBI Act, 1992 and the regulations framed thereunder.

The 16 Entities are-OSPL Infra deal Private Limited, Bharat Road Network Limited, Platinum Infrastructure Pvt. Ltd, Ad Advertising Pvt. Ltd., Artifice Properties Pvt. Ltd., Best Health Management Pvt. Ltd., Devera Developers Pvt. Ltd., Vitoba Realtors Pvt. Ltd., Fern Healthcare Pvt. Ltd., Modland Wears Pvt. Ltd. Rose star Marketing Pvt. Ltd., Star Artworks Pvt. Ltd., Tripoli Investment & Trading Co., Volga Management and Consultancy Pvt. Ltd., Zolton Properties Pvt. Ltd., Ranchem Private Limited.(Entities 1-16).

Vide the Interim Order, SEBI had directed REL and RFL to initiate steps to recall all the loans, amounting to Rs.2315.09 Crores (approx.), extended directly or indirectly to certain entities including the abovementioned 16Noticees, along with due interest, within three months of the date of the Interim Order.

The said entities were also directed not to dispose of or alienate any of their assets or divert any funds, except for meeting expenses of day-to-day business operations, without the prior permission of SEBI, pending completion of the investigation and till further orders.

The Whole Time Member of SEBI, G. Mahalingam has noted that it appeared appropriate to substitute the ongoing proceedings under Section 11 / 11B of the SEBI Act, 1992 against the above mentioned 16 entities with adjudication proceedings under appropriate legal provisions, for their alleged role in the above mentioned diversion of funds.

Therefore, in exercise of the powers conferred upon by virtue of Section 19 read with Sections 11and 11B of the SEBI Act, 1992, the Whole Time Member has revoked the directions issued vide the Interim Order read with the Confirmatory Order against the entities 3 to 16 and has also disposed of the ongoing proceedings under Section 11 / 11B of the SEBI Act, 1992 against the entities mentioned at serial nos. 1 to 16.

This order has been passed without prejudice to the rights of REL and RFL to pursue remedies under law, as deemed appropriate by them, against the above mentioned entities in respect of their roles in the fund diversion.

It has further been directed that the Adjudicating Officer appointed in the matter pursuant to this order shall carry out the adjudication proceedings in an independent manner without getting influenced by this order of revocation.