The unraveling of one of India’s most storied business empires has caused a rupture in its founding family, with one of the Singh brothers – synonymous with each other for decades – saying he has sued the other for alleged oppression and mismanagement of their companies. In a statement, Shivinder Singh said he filed a case with India’s National Company Law Tribunal against his elder brother Malvinder and Sunil Godhwani, former chairman of Religare Enterprises Ltd., the financial services company the brothers used to control. Shivinder alleges Malvinder and Godhwani were to blame for “a systematic undermining of the interests of the companies and their shareholders.” Malvinder, 45, and Godhwani couldn’t be reached for comment.
“I am now disassociating from my brother as a business partner and will be pursuing an independent path going forward,” Shivinder, 43, wrote in the statement dated September 4. “I can no longer be party to activities in which transparency and ethics are continuously and consistently negated.” Bloomberg News couldn’t immediately obtain the case filing from the tribunal, which couldn’t be reached.
Heirs to a generations-old business house once worth billions, the brothers have in recent months seen a dramatic fall in their fortunes. They’ve had their public shareholdings seized by lenders, and are under a criminal probe by financial authorities over ₹23 billion (USD 321 million) missing from their listed companies. They owe USD 500 million over fraud allegations related to the 2008 sale of drug maker Ranbaxy Laboratories. The brothers have previously denied any wrongdoing.
Last month, Bloomberg News published a story detailing the business linkages between the brothers and Gurinder Singh Dhillon, the head of a spiritual sect in North India called the Radha Soami Satsang Beas. These included loans to Dhillon’s family and companies controlled by them, which Bloomberg New’s investigation found to be a key financial strain on their empire. Dhillon hasn’t been accused of any wrongdoing. Shivinder in the statement said he filed the case against his brother and Godhwani after media articles. “Attempts to pass the buck to an eminent figure, who has been a guiding light not only to our family but also to a large section of the public, deceives no one,” Shivinder wrote. He also said Malvinder was chairman of their corporate group and took decisions on behalf of the family, while he was “the publicly supportive younger brother.”
The Singhs are famous in India for expanding their two public firms, hospital operator Fortis Healthcare Ltd. and financial firm Religare, at breakneck speed after reaping USD 2 billion from the sale of Ranbaxy, then India’s largest drug maker. Both companies went on to top USD 1 billion in market value as India’s demand for health and financial services surged. India’s stock market and fraud regulators have launched investigations into financial irregularities at Religare and Fortis, although they are yet to report their findings. In July Malaysia’s IHH Healthcare Bhd agreed to take control of Fortis and minority shareholders have taken over at Religare. The Singhs resigned from their posts at Fortis in February. They’ve lost almost all their shareholdings in both Fortis and Religare as their lenders called in unpaid debts. – Hindustan Times