Religare Enterprises and Religare Finvest on Tuesday settled fees cumulatively over Rs. 10.50 crore with markets regulator SEBI in connection with alleged financial mismanagement and diversion of funds.
Separately, Religare Enterprises settled fees of approx. 5.42 crore, while Religare Finvest settled around 5.09 crores.
The payment comes after the two companies filed a settlement application through a settlement order in November 2020 “without accepting or denying the findings of fact and the findings of law”.
SEBI has received complaints alleging financial mismanagement and diversion of funds primarily for the benefit of promoters/promoter group companies in Religare Finvest, a listed company, a subsidiary of REL.
Subsequently, SEBI conducted an investigation, where it was found that Religare Finvest was part of a fraudulent and misleading scheme and acted in a fraudulent manner, leading to diversion of funds. 2,473.66 crore through a material subsidiary of REL for the ultimate benefit of the promoters. Further, it was observed that the consolidated financials of REL were not fair and fair and were misleading the shareholders of the listed company, the market regulator said in the statement.
SEBI had also observed that REL did not disclose the same to the stock exchanges till 2017 despite repeated adverse comments by the Reserve Bank of India with regard to the corporate loan book of RFL.
“The authorized representatives of the applicants held a meeting with the internal committee of SEBI on December 23, 2021 and discussed the terms of settlement. Thereafter, the applicants proposed revised settlement terms to settle the proceedings initiated against them ,” said the SEBI statement.
Later on March 17, 2022, the High Powered Advisory Committee considered the settlement terms proposed by the companies and recommended the matter for settlement of the above amounts.
Now with the settlement, SEBI said, “This order disposes of the enforcement proceedings initiated by SEBI for the default, as mentioned earlier in respect of the applicants,” adding, “This order is for the said default.” Will not initiate enforcement action against applicants.”
Religare Enterprises closed today on BSE 122.35 each flat as compared to the previous close.