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Religare Enterprises and Religare Finvest on Tuesday settled fees of cumulatively more than ₹10.50 crore with market regulator Sebi in a case about alleged financial mismanagement and diversion of funds.
Separately, Religare Enterprises settled fees to the tune of nearly ₹5.42 crore, while Religare Finvest settled nearly ₹5.09 crore.
The payment comes after both the companies had filed a settlement application in November 2020, “without admitting or denying the findings of fact and conclusions of law” through a settlement order.
Sebi had received complaints alleging financial mismanagement and diversion of funds primarily in Religare Finvest, a subsidiary of REL which is a listed company, for the benefit of the promoters/promoter group companies.
Thereafter, SEBI conducted an investigation where it observed that Religare Finvest was part of a fraudulent and deceptive scheme and acted in a fraudulent manner which led to the diversion of funds to the tune of ₹2,473.66 crore approximately through a material subsidiary of REL for the ultimate benefit of promoters. Further, it was observed that the consolidated financials of REL were not true and fair and were misleading to the shareholders of the listed company, the market regulator said in the statement.
Sebi also had observed that despite repeated adverse observations from the Reserve Bank of India regarding RFL’s Corporate Loan Book, REL did not disclose the same to the stock exchange till 2017.
“The authorized representatives of the applicants had a meeting with the Internal Committee of SEBI on December 23, 2021, and deliberated on the terms of the settlement. Thereafter, the applicants proposed the revised settlement terms to settle the proceedings initiated against them,” Sebi’s statement said.
Later on March 17, 2022, the High Powered Advisory Committee considered the settlement terms proposed by the companies and recommended the case for settlement of the above-mentioned amounts.
With the settlement now cleared, Sebi said “this order disposes of the enforcement proceedings initiated by SEBI for the defaults as mentioned earlier in respect of the applicants,” adding, “it shall not initiate enforcement action against the applicants for the said defaults.”
On BSE, Religare Enterprises closed at ₹122.35 apiece flat compared to the previous closing.
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