{"id":216662,"date":"2019-07-10T10:30:32","date_gmt":"2019-07-10T05:00:32","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=216662"},"modified":"2019-07-12T15:27:54","modified_gmt":"2019-07-12T09:57:54","slug":"sebi-fortis-case-order-against-religare-finvest-partly-modified-allowing-religare-to-sell-assets-to-arcs-restructure-debt-and-raise-capital","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2019\/07\/10\/sebi-fortis-case-order-against-religare-finvest-partly-modified-allowing-religare-to-sell-assets-to-arcs-restructure-debt-and-raise-capital\/","title":{"rendered":"SEBI | Fortis Case: Order against Religare Finvest partly modified, allowing Religare to sell assets to ARCs, restructure debt and raise capital"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Securities and Exchange Board of India:<\/strong> G. Mahalingam (Whole Time Member) partly modified its order against Religare Finvest Limited (RFL) in the matter of Fortis Healthcare by allowing the firm to dispose of its assets subject to certain conditions.<\/p>\n<p style=\"text-align: justify;\">The securities market regulator vide its order dated 19-03-2019, had barred Singh brothers \u2013 Shivinder Mohan Singh and Malvinder Mohan Singh (former promoters of Fortis Healthcare) \u2013 from selling any of their assets till they, along with seven other companies associated with them pay back Rs 403 crore that they had taken out from the hospital chain. The said order was passed when it came to notice that Fortis Hospitals had entered into multiple structured transactions from 30-06-2016 to 30-06-2017, which were prima facie fictitious and fraudulent in nature as the ultimate beneficiaries of these transactions were Singh brothers. The Board had also directed RFL (of which Singh brothers were the promoters) to not dispose of, alienate or divert any of its assets except for complying with a corrective action plan as stipulated by Reserve Bank of India (RBI).<\/p>\n<p style=\"text-align: justify;\">The instant order was passed in an application filed by RFL on 20-06-2019, whereby it sought relaxations from SEBI in order to execute revival plan for the betterment of the company by taking required steps, including the restructuring of loans and securitization\/ assignment of its assets to Asset Reconstruction Companies (ARCs) to reduce its standing liability.<\/p>\n<p style=\"text-align: justify;\">SEBI noted that RFL was a Non-Banking Financial Company (NBFC) registered with RBI, and functioned under its overall regulatory supervision. Further, RFL\u2019s current cash flows were insufficient to meet the immediate one-year debt obligations; banks had the first charge over all its assets and coercive steps of a bank for recovery of dues were highly possible. Also, RFL was prohibited from the expansion of credit\/ investment portfolios other than investment in government securities.<\/p>\n<p style=\"text-align: justify;\">In view of the above, it was opined that RFL was under severe financial strain and was staring at the possibility of default in meeting its debt obligations to the lender banks. Thus, proposed measures like the restructuring of RFL\u2019s debt with lender banks, assignment of its SME gross NPAs to ARCs and raising of capital to meet capital adequacy norms were essential for survival and revival of the company.<\/p>\n<p style=\"text-align: justify;\">Thus, the Board modified the directions contained in its 19-03-2019 order holding that RFL shall not dispose of or alienate funds assets without the prior permission of SEBI, <em>\u201cexcept for meeting expenses of day-to-day business operations and taking all measures as it deems fit for revival of RFL (including restructuring of its debts\/loans, assignment of its financial assets to ARCs, raising of capital, borrowing, etc.), subject to strict adherence to the terms of \u201cCorrective Action Plan\u201d<\/em>.[Fortis Healthcare Ltd., In Re, <a href=\"http:\/\/scconline.com\/DocumentLink\/ppv668rz\"><b>2019 SCC OnLine SEBI 55<\/b><\/a>, decided on 28-06-2019]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Securities and Exchange Board of India: G. Mahalingam (Whole Time Member) partly modified its order against Religare Finvest Limited (RFL) in the <\/p>\n","protected":false},"author":8808,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,11],"tags":[2881,36530,36527,36528,36529,36526],"class_list":["post-216662","post","type-post","status-publish","format-standard","hentry","category-casebriefs","category-tribunals_commissions_regulatorybodies","tag-Assets","tag-fortis","tag-government-securities","tag-non-banking-financial-company","tag-religare-finvest-limited","tag-securities-market-regulator"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEBI | Fortis Case: Order against Religare Finvest partly modified, allowing Religare to sell assets to ARCs, restructure debt and raise capital | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2019\/07\/10\/sebi-fortis-case-order-against-religare-finvest-partly-modified-allowing-religare-to-sell-assets-to-arcs-restructure-debt-and-raise-capital\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEBI | Fortis Case: Order against Religare Finvest partly modified, allowing Religare to sell assets to ARCs, restructure debt and raise capital\" \/>\n<meta property=\"og:description\" content=\"Securities and Exchange Board of India: G. 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Co advises a consortium of 16 lenders led by State Bank of India (&#8220;Lenders&#8221;) in relation to settlement of the outstanding debt liability","author":"Bhumika Indulia","date":"January 12, 2023","format":false,"excerpt":"DEAL DETAILS State Bank of India | Religare Finvest - Pre-insolvency resolution and related issues NO HEADINGS DETAILS 1.\u00a0 Name of Client State Bank of India 2.\u00a0 Deal Description Advised a consortium of 16 lenders led by State Bank of India (\"Lenders\") in relation to settlement of the outstanding debt\u2026","rel":"","context":"In &quot;Law Firms News&quot;","block_context":{"text":"Law Firms News","link":"https:\/\/www.scconline.com\/blog\/post\/category\/news\/law-firms-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/01\/MicrosoftTeams-image-62.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":325264,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/06\/28\/del-hc-denies-travel-permission-upholds-lookout-circular-indian-businessman-billionaire-fraud-investigation-legal-news\/","url_meta":{"origin":216662,"position":1},"title":"Delhi High Court upholds LOC against Businessman amid fraud investigation into Fortis Healthcare and Religare Enterprises","author":"Arunima","date":"June 28, 2024","format":false,"excerpt":"The petitioner is an Indian businessman and erstwhile billionaire with Fortis Healthcare, Religare, and Ranbaxy Laboratories, seeking permission to go abroad to attend the graduation ceremony of his two sons one on 01-07-2024 at Durham University and the other on 02-09-2024 at University College London.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Delhi High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Delhi-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":181054,"url":"https:\/\/www.scconline.com\/blog\/post\/2018\/01\/13\/grounds-not-urged-appeal-arbitral-award-may-not-raised-second-appeal\/","url_meta":{"origin":216662,"position":2},"title":"Grounds not urged in an appeal against arbitral award may not be raised in second appeal","author":"Saba","date":"January 13, 2018","format":false,"excerpt":"Delhi High Court: A Division Bench comprising of G.S Sistani and V Kameswar Rao, JJ., dismissed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter \u201cArbitration Act\u201d) read with Section 10 of the Delhi High Court Act, 1966 and Section 13 of the Commercial Courts Act,\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":204098,"url":"https:\/\/www.scconline.com\/blog\/post\/2018\/10\/23\/fortis-healthcare-limited-alleged-with-diversion-of-funds-in-favour-of-its-promoters-direction-to-recover-the-amount-issued-sebi\/","url_meta":{"origin":216662,"position":3},"title":"Fortis Healthcare Limited alleged with diversion of funds in favour of its promoters; direction to recover the amount issued: SEBI  \u00a0","author":"Bhumika Indulia","date":"October 23, 2018","format":false,"excerpt":"Securities Exchange Board of India (SEBI), Mumbai: A Whole Time Member G. Mahalingam passed directions exercising his powers under Section 19 read with Sections 11(1), 11(4) and 11B of the SEBI Act, 1992 in a case of diversion of funds. The facts of the case were that SEBI initiated examining\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":272627,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/08\/30\/bombay-hc-s-14-sarfaesi-act-empowers-designated-authority-assist-secured-creditors-possession-secured-assets-legal-updates\/","url_meta":{"origin":216662,"position":4},"title":"Bombay High Court| S. 14 of SARFAESI Act empowers the Designated Authority only to assist secured creditors in taking possession of secured assets and nothing more","author":"Editor","date":"August 30, 2022","format":false,"excerpt":"Bombay High Court: While deciding the instantwrit petition wherein the issue was regarding transgression of Additional District Magistrate's jurisdiction under Section 14 of the SARFAESI Act; the Division Bench of A.S. 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Shriram, JJ., observed that the jurisdiction of the Designated Authority under Section 14 of the SARFAESI\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Bombay High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/02\/Bombay-HC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":228011,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/04\/07\/covid-19-del-hc-dr-shivendra-mohan-singh-of-fortis-healthcare-in-his-cell-is-in-isolation-and-is-maintaining-social-distancing-hence-denied-interim-bail\/","url_meta":{"origin":216662,"position":5},"title":"COVID-19 | Del HC | Dr Shivendra Mohan Singh of Fortis Healthcare, in his Cell, is in isolation and is maintaining &#8220;social distancing&#8221;; hence denied interim bail","author":"Bhumika Indulia","date":"April 7, 2020","format":false,"excerpt":"Delhi High Court:\u00a0Mukta Gupta, J. dismissed a petition for grant of interim bail filed by Dr Shivendra Mohan Singh of Fortis healthcare. 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