Delhi court frames charges against Religare Finvest ex-promoters

What the Record Shows

A Delhi trial court framed charges against Malvinder Mohan Singh and Shivinder Mohan Singh, the former promoters of Religare Finvest Ltd, in January 2025, in a criminal case arising from the alleged diversion of the non-banking financial company's corporate loan book. The charges, which the accused deny, concern offences of cheating and criminal conspiracy alleged in the first information report registered by the Delhi Police Economic Offences Wing. The framing of charges means the trial will proceed; it is not a finding of guilt.

The criminal case rests on FIR No. 50/2019 and the chargesheet the Economic Offences Wing filed on 6 January 2020, with a supplementary chargesheet on 15 January 2020, invoking Sections 409, 420 and 120-B of the Indian Penal Code. Per the Delhi High Court's order of 14 June 2021 in the related bail litigation, the prosecution alleges that unsecured loans from Religare Finvest's corporate loan book, running to roughly Rs 2,300 crore, were disbursed to entities connected to the promoters that had, in the words recorded in the order, "no financial standing", and were not repaid.

Alongside the criminal proceeding, two regulators have acted. SEBI, in a July 2022 order, penalised ten entities a total of Rs 60 crore and barred the Singh brothers from the capital market for three years. Separately, the National Financial Reporting Authority (NFRA), by an order dated 30 January 2025, penalised the FY2017-18 statutory auditor of Religare Finvest for a delay in reporting a fraud it had identified in the loan book. These are distinct proceedings with distinct figures, and none of them is a criminal conviction.

How It Worked

The core allegation, as set out in the chargesheet and summarised in the Delhi High Court's 2021 order, is that Religare Finvest's corporate loan book was used to route funds to companies connected to the then promoters rather than to arm's-length borrowers. The prosecution alleges the loans were advanced to entities including RHC Holding Pvt Ltd and Ranchem Pvt Ltd, described in the order as owned by the two brothers, and that the money was not returned, depleting the NBFC. All of this is at the allegation stage; the trial will test it.

The regulatory strands describe the same underlying facts through different lenses. SEBI's July 2022 action, per that order, followed its direction to Religare Finvest and its parent Religare Enterprises to recall loans of more than Rs 2,300 crore, and imposed penalties for what SEBI treated as a diversion that harmed the listed entities' shareholders. The Singh brothers were each penalised and restrained from the market for three years under that order.

The NFRA strand is narrower and, unusually, is about the machinery of fraud detection itself. Under Section 143(12) of the Companies Act, 2013, an auditor who has reason to believe a fraud is being committed must report it within a defined timeline. Per NFRA's order of 30 January 2025, the auditor for FY2017-18 delayed that statutory report on a fraud already identified in the corporate loan book, stated in the order to run to around Rs 2,036 crore, and NFRA imposed a monetary penalty and a debarment for the lapse. That order concerns the auditor's reporting conduct, not the underlying diversion, and carries its own appellate route.

It is worth separating the numbers, because they belong to different proceedings: the criminal case turns on the Economic Offences Wing's chargesheet, the SEBI penalties on SEBI's order, and the NFRA figure on the auditor's reporting failure. Conflating them overstates any single proceeding.

Who Lost Money

The parties said to have been harmed sit at several levels. Religare Finvest itself, as the NBFC whose loan book was allegedly emptied, is the primary alleged victim; the prosecution's case is that its capital was depleted by loans that were never recovered. Beyond the company, the public shareholders of Religare Finvest and Religare Enterprises, and the NBFC's depositors and lenders, are the wider constituency SEBI's order sought to protect.

How much has actually been recovered is a separate question from how much is alleged to have been diverted. SEBI directed the recall of loans exceeding Rs 2,300 crore, but recall directions and actual recovery are not the same thing, and money routed through connected entities and disputed across multiple forums is typically recovered slowly and partially, if at all. The company has pursued recovery through civil and regulatory channels in parallel with the criminal case.

Because the matter is pre-trial on the criminal side and open to challenge on the regulatory side, no final accounting of investor loss and recovery can yet be stated. What can be said is that the alleged sums are large and the recovery is incomplete.

Where It Stands Now

As of now, the criminal case is at trial after charges were framed in January 2025; it has not reached judgment, and both former promoters deny the allegations. SEBI's 2022 penalties and market bar were imposed by that regulator and are subject to the appellate remedies available under the securities law. NFRA's 30 January 2025 order against the auditor is similarly open to challenge, and NFRA's disciplinary process is itself the subject of a wider legal question before the higher courts.

A chargesheet, and the framing of charges on it, contains allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues. That principle governs how every claim in this matter should be read until a court decides.

The next milestones are the recording of evidence in the criminal trial and the outcome of any appeals against the SEBI and NFRA orders. None of those outcomes can be predicted here.

What It Means

The Religare Finvest matter is a study in how many separate mechanisms engage when a promoter-connected diversion is alleged: a criminal case run by the police, a market-conduct order by SEBI, and an auditor-accountability order by NFRA, each with its own standard of proof and its own appeal. For anyone reading enforcement news, the practical lesson is that these run on different tracks and at different speeds, and a penalty in one does not settle the others.

The auditor strand carries a specific, useful takeaway. Section 143(12) exists so that a fraud spotted inside a company reaches the regulator quickly; the value of the provision depends on the report being timely, which is exactly what NFRA's order addressed. For depositors and investors, the durable protection is to check an NBFC's regulatory standing and audited disclosures rather than headline growth, and to follow how such matters resolve in the enforcement archive at /news?cat=enforcement.

The case sits alongside other auditor-accountability matters, such as the revival of the SFIO case against the IL&FS auditors and the litigation over NFRA's own disciplinary powers. Read together, they show a regulatory system building several overlapping checks on how large loan books are lent and how they are audited.

FAQ

Does a chargesheet mean the people named are guilty?

No. A chargesheet, and the framing of charges on it, contains allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues. The Delhi court framed charges in January 2025, which sets the trial in motion, but the trial has not concluded and the former promoters deny the allegations.

What exactly has happened in the criminal case?

The Delhi Police Economic Offences Wing registered FIR No. 50/2019 and filed a chargesheet in January 2020 alleging cheating and criminal conspiracy in the diversion of Religare Finvest's corporate loan book. A Delhi court framed charges against the former promoters in January 2025, so the matter is now at trial.

What did SEBI and NFRA do?

SEBI, in a July 2022 order, penalised ten entities Rs 60 crore and barred the Singh brothers from the capital market for three years. NFRA, by an order dated 30 January 2025, penalised the FY2017-18 statutory auditor of Religare Finvest for delay in reporting a fraud identified in the loan book under Section 143(12) of the Companies Act. These are separate from the criminal case.

Are the different amounts the same money?

They are related but should not be conflated. The criminal case, the SEBI order and the NFRA order cite different figures for different purposes, and each belongs to its own proceeding. Reporting a single combined number would overstate any one of them.

Have investors and the NBFC recovered the money?

Recovery is incomplete. SEBI directed the recall of loans exceeding Rs 2,300 crore, but a direction to recall is not the same as money recovered, and funds routed through connected entities are typically recovered slowly, if at all. The company has pursued recovery in parallel with the criminal case.

Where can I read the official records?

The Delhi High Court's order in the bail litigation and NFRA's order against the auditor are both linked in the source note below.

This report is based on the order of the Delhi High Court dated 14 June 2021 in Religare Finvest Ltd v State of NCT of Delhi and the NFRA order dated 30 January 2025 in the matter of Religare Finvest Limited, reviewed on 2 August 2026.