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EOW arrests two officials of Lakshmi Vilas Bank for misappropriation of Religare Finvest FDs


MUMBAI: Two Lakshmi Vilas Bank (LVB) officials were arrested on Thursday by a Delhi Police team for their alleged role in squaring off Rs 791-crore worth of Religare Finvest (RFL) fixed deposits against what the company described as unrelated loans from the lender.

The first information report (FIR) was registered in September last year by RFL for alleged criminal breach of trust and criminal conspiracy against LVB and two firms — RHC Holdings and Ranchem. The two firms belong to Malvinder Singh and Shivinder Singh, the erstwhile promoters of Religare.

Malvinder and Shivinder are in judicial custody in connection with another case. LVB and RFL did not respond to ET queries.

The bank in July 2017 had adjusted a fixed deposit of Rs 791 crore deposited by RFL toward the default on a loan made by RHC Holdings and Ranchem. This adjustment was disputed by Religare Finvest in the court.

The FIR by Religare Finvest was registered on the basis of the internal probes and findings of regulatory authorities such as Sebi and the central bank.

Sources said that the investigation is still ongoing and the Investigating Officer of the Economic Offences Wing of the police is likely to be filing a supplementary FIR.

RFL in its complaint alleged that the modus operandi adopted in this matter was to initially induce RFL to make deposits of the amount of Rs. 750 crores with LVB and subsequently, without any legal basis, criminally misappropriating the said amount deposited in good faith with LVB, allegedly to square off the debt owed by accused RHC Holding and Ranchem.

“The said deposits relate to Religare Finvest and the same were held as security for the loans extended to RHC Holding and Ranchem Pvt Ltd. On account of default in clearing the loans, the said deposits were closed and the proceeds were adjusted to clear the said loans,” the bank said in an exchange filing on May 25, 2018.


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