SAT directs Malvinder Singh, Malav Holdings to deposit 50% of Sebi penalty

The Securities Appellate Tribunal (SAT) has directed businessman Malvinder Singh and Malav Holdings to deposit 50 per cent of the penalty amount imposed by markets regulator Sebi within six weeks

The Securities Appellate Tribunal (SAT) has directed businessman Malvinder Mohan Singh and Malav Holdings to deposit 50 per cent of the penalty amount imposed by markets regulator Sebi within six weeks in connection with violations in a case related to Fortis Healthcare.

If they deposit the amount, then the market regulator will not collect the remaining penalty during the pendency of the appeal, the appellate tribunal said in its order.

The amount deposited by the appellants will be kept in an interest bearing account and would be subject to the result of the appeal, it added.

The order came after Singh and others approached SAT against the capital markets regulator's order passed in April, whereby it had slapped a fine of Rs 5 crore on Singh, who was the promoter of Fortis Healthcare, besides Rs 2.5 crore each on Malav Holdings, a company owned by Singh, and Gagandeep Singh Bedi, who was the chief financial officer of Fortis Healthcare.

 

In addition, Sebi had barred Malvinder Mohan Singh and his brother Shivinder Mohan Singh from the securities market for a period of three years. They have also been restrained from being associated as directors or key managerial personnel in a listed company or Sebi-registered intermediary of any market infrastructure institution.

The case relates to the Singh brothers, along with other entities, allegedly diverting funds from Fortis Healthcare for the ultimate benefit of RHC Holding Pvt Ltd -- an entity indirectly owned and directly controlled by the erstwhile promoters.

These entities acted in a fraudulent and deceptive manner which led to misuse and/or diversion of funds to the tune of Rs 397.12 crore for the ultimate benefit of RHC Holding, as per the order.

It was also alleged that Gagandeep Singh Bedi deliberately failed to carry out adequate due diligence and exercise independent judgement.

In an order passed on Monday, SAT directed "the appellant Malvinder Mohan Singh, noticee no.2 and Malav Holdings P. Ltd., noticee no.4 each deposit 50 percent of the penalty amount within six weeks from today."

Bedi has been asked to deposit Rs 25 lakh within six weeks.

August 1 is the next date of hearing.

Malvinder Mohan Singh's counsel submitted before the appellate tribunal that Singh was not given adequate opportunity to contest the matter. It has been stated that the appellant is still in jail and that his advocate could not have access to him and could not receive adequate instructions.

The counsel further said it is not known as to how much penalty has been calculated under each head, adding that the penalty amount is excessive.

Singh brothers are now not associated with Fortis Hospitals and Fortis Healthcare.