SAT dismisses Shivinder Singh’s plea against SEBI’s loan recall order
The Securities Appellate Tribunal (SAT) dismissed the appeal of Shivinder Mohan Singh, a former promoter of Fortis Healthcare, against Sebi’s order asking Religare Enterprises and Religare Finvest to recall the loans.
The Securities and Exchange Board of India (Sebi), through an interim order in March 2019, had asked Religare Enterprises and Religare Finvest to take action to recall loans worth Rs 2,065 crore granted to Singh and several other entities.
Funds were misappropriated from Religare Finvest’s books for the use of promoters and entities of the promoter group of Religare Enterprises, in accordance with the Interim Order.
Management intervened after the regulator received complaints alleging financial mismanagement and embezzlement at Religare Finvest, a subsidiary of Religare Enterprises.
A confirmation order was placed in September 2019. Following Sebi’s confirmation order, Singh approached the SAT.
Dismissing his plea, the SAT said Singh was a director and promoter of both companies when the alleged embezzlement took place.
Further, the court said Singh’s claim that he had nothing to do with embezzlement could not be accepted in principle at this point.
“We are not inclined to interfere with the disputed orders at this late stage. The appeal fails and is dismissed with a direction that the WTM (full-time member) will decide the case within six months from the date the appellant (Singh) files their objection / response to the notice. of justification, ”the court said in an order passed Dec. 24.
Singh’s lawyer had challenged Sebi’s order arguing that the regulator’s confirmatory order ordering the recall of the loans is illegal.
The order, which has the character of a postponement, can not be made at a stage when the investigation initiated by Sebi is still ongoing, argued the lawyer.
It was argued that such an ordinance, which has the finality element, could only be adopted after a full investigation.
Singh also argued that he had played no role in the embezzlement and accused other notices of orchestrating the alleged embezzlement.