Malvinder Singh and Shivinder Singh, the former promoters of Fortis Healthcare Ltd., and three others were remanded to a four-day police custody by a Delhi court Friday.
Chief Metropolitan Magistrate Deepak Sherawat allowed their custodial interrogation by the Delhi Police.
The Economic Offences Wing of the Delhi Police had over Thursday night and Friday morning arrested the Singh brothers, Sunil Godhwani—the former head of Religare Finvest Ltd.—and two others on charges of siphoning funds and fraudulently diverting nearly $337 million from the financial services company.
The accused, with “absolute control on Religare Enterprises Ltd. and its subsidiaries put Religare Finvest Ltd. in poor financial condition by way of disbursing loans to companies having no financial standing,” the Delhi Police said in its statement on Thursday. The companies receiving these sums “willfully defaulted in repayments” causing a loss of 23.97 billion rupees ($337 million), it added.
The arrests mark the beginning of the final act in the precipitous fall of what was once one of India's most prominent business families. The Singh brothers were heirs to an empire that included India's top drug maker, Ranbaxy Laboratories Ltd. and later its second-largest hospital chain, Fortis Healthcare. But in recent years they lost all their major businesses amid allegations of fraud and mounting debts.
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