Indian police have arrested two businessmen brothers over alleged embezzlement of more than $330m (£265m) from a financial services company.
Shivinder Singh and Malvinder Singh, former promoters of the pharmaceutical giant Ranbaxy, were once counted among the richest businessmen in India.
The brothers also owned a popular hospital chain.
Three key executives belonging to the finance company have been also held in connection with the case.
The Singh brothers were arrested by the economic offences wing of the Delhi police on Thursday evening. They have been charged with cheating, criminal conspiracy and criminal breach of trust. They deny the charges.
The brothers have both denied all the fraud allegations against them.
“The alleged persons, having absolute control on [REL] and its subsidiaries, put Religare Finvest Limited (RFL) in poor financial condition by way of disbursing the loans to the companies having no financial standing, and controlled by the alleged persons,” according to a police statement. In addition, “these companies willfully defaulted in repayments, and caused wrongful loss to RFL to the tune of Rs2,397 crores [($338 million USD)].”
Moreover, “the alleged persons systematically siphoned off and diverted money of [the] general public in a clandestine manner for their own benefit. Further investigation of the case is in progress,” said Financial Times.
The brothers oversaw the massive $4.7 billion sale of drugs company Ranbaxy to Japan’s Daiichi Sankyo in 2008 — the biggest foreign acquisition of an Indian company. However, the United States soon imposed sanctions on Ranbaxy for violating quality standards, and the Singh brothers were fined Rs35 billion for withholding information during the deal.
The relationship between the brothers soured as their legal troubles grew. While Shivinder was persuaded by their mother to drop a case against his brother, accusing him of “oppression and mismanagement,” Malvinder wound up filing a criminal complaint a few months later, accusing Shivinder of diverting funds to a guru in charge of one of the country’s spiritual sects.
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