Delhi Police FIR against Lakshmi Vilas Bank directors, Singh brothers for cheating, conspiracy

Lakshmi Vilas Bank (LVB) has informed the stock exchanges that the Economic Offences Wing (EOW) of the Delhi Police has lodged an FIR against its director and board members and others on the charges of "cheating, criminal breach of trust by banker, criminal misappropriation and criminal conspiracy". The FIR was lodged on the complaint of Religare Finvest Ltd, which is the lending entity of Religare Enterprises. "The case pertains to the adjustment of RFL deposits to the dues of RHC Holding Pvt Ltd and Ranchem Pvt Ltd," LVB informed the stock exchanges on Thursday.

Lakshmi Vilas Bank also said it had received the copy of the FIR on December 25, and that the bank was considering appropriate legal measures to counter the same. On May 16, Religare Enterprises Ltd had told the stock exchanges that its subsidiary RFL had filed a criminal complaint with the Economic Offences Wing of the Delhi Police against Lakshmi Vilas Bank, its board directors and certain employees; RHC Holding Pvt Ltd, its board members and certain employees; and Ranchem Pvt Ltd, its board members and certain employees, including Malvinder Singh and Shivinder Singh for cheating and criminal conspiracy.

REL was controlled by Malvinder and Shivinder until February 2018. Post their exit on February 14, 2018, the REL and RFL boards were re-constituted. As per the REL statement, the new board had discovered that one of the major reasons for RFL's terrible financial condition "was the misappropriation by LVB of monies due to RFL on account of four fixed deposits worth Rs 791 crore (including interest incurred on principal amount of Rs 750 crore)".

This misappropriation caused a massive unlawful loss to RFL and, consequently, to all its stakeholders, including the public shareholders, it had added. Lakshmi Vilas Bank last year had said the adjustment of over Rs 790 crore deposits of Religare Finvest, held as security for loans taken by other two firms, was legal and that it was fighting the case in the court appropriately.

Meanwhile, the shares of Lakshmi Vilas Bank were locked at 5% lower circuit in Friday's trading session after the Economic Offences Wing in New Delhi registered a First Information Report (FIR) against board members of the lender. Lakshmi Vilas formed a gap down chart pattern and opened with a loss of 4.94% today, hitting the 5% lower circuit at Rs 36.55. The share price is trading 4.38% away from 52 week low of Rs 34.95 on the BSE. Volume-wise, shares totalling to 1 lakh and 1.5 lakhs are changing hands on BSE and NSE.

Also read: Lakshmi Vilas Bank shares locked at 5% lower circuit after FIR against its directors

Edited by Manoj Sharma