RSSB guru has reason to fear the forensic audit required by the Delhi High Court

In my previous post, “Delhi High Court ruling could be bad news for Gurinder Singh Dhillon and his family,” I shared reporting from the Indian financial press about a forensic audit required by the court that seeks to understand why a $4.6 billion arbitration award won by the Japanese pharmaceutical firm Daiichi Sankyo against Malvinder and Shivinder Singh in 2008 hasn’t been able to be paid by the Singh brothers.

Now I’m going to explain, as best I can, because this financial fraud saga is highly complex (hence the need for the forensic audit), how the guru of Radha Soami Satsang Beas, Gurinder Singh Dhillon, seems to be involved in this mess.

A Business Standard story does a good job of conveying what the forensic audit will entail. Here’s a PDF file of the story in case that link doesn’t work for you.
Delhi High Court orders 6-month forensic audit in Daiichi-Fortis case | India News – Business Standa

Some excerpts point to why the RSSB guru has reason to fear the forensic audit.

The Delhi High Court (HC) has ordered a six-month forensic audit into the alleged dissipation of assets of former Fortis promoters Malvinder Mohan Singh and Shivinder Mohan Singh during enforcement proceedings initiated by Japanese drug major Daiichi Sankyo.

…The court observed that almost a decade had passed since execution proceedings began, while assets originally available to satisfy the award had progressively diminished.

…The audit will extend beyond the Singh brothers to banks and financial institutions involved in transactions affecting assets represented as available for satisfying the award. FHL, its directors and officers, company secretary, compliance officer, registrar and transfer agent, depositories, and other intermediaries will also come under scrutiny.

…Daiichi has alleged that the ₹4,666 crore transferred to RHT was not available for satisfying the arbitral award and has sought scrutiny of the transactions between FHL, IHH, and RHT.

The audit will also examine transactions involving entities associated with the Singh group, including Religare Capital Markets, Religare Capital Markets International (Mauritius), Religare Enterprises, Religare Finvest, and Religare Comtrade, as part of the broader exercise to trace the alleged dissipation of assets.

Lawyers said the order is significant because it moves the dispute from allegations in pleadings to a court-supervised reconstruction of the money and share trail.

…The auditor will examine pledges, share transfers and sales, sale proceeds, downstream loans, bank and demat records, board minutes, shareholder resolutions, statutory registers, emails, legal opinions, and regulatory filings, besides identifying those who proposed, approved or facilitated the transactions.

…The audit is to be completed within six months, with Daiichi bearing the initial cost. The matter has been listed for April 1, 2027.

Simply put, at one point Malvinder and Shivinder Singh apparently had enough money to pay the $4.6 billion arbitration award to Daiichi. Then they didn’t. Since Daiichi wants to be paid, the corporation wants to find out where the money they are owed went, apparently in hopes that it can be recovered to pay all or part of the arbitration award.

There could be several reasons why the assets of the Singh brothers were dissipated. One big reason alleged by Malvinder Singh is that large sums of money from companies controlled by the Singh brothers ended up in the pockets of Gurinder Singh Dhillon and his family. I wrote about this in a 2019 post, “Legal filing against Gurinder Singh Dhillon is fascinating reading.”

This is how my post starts out.

Someone sent me a copy of the legal brief filed by Malvinder Singh against his cousin, Gurinder Singh Dhillon, the guru of Radha Soami Satsang Beas; the guru’s wife and children; Malvinder’s brother, Shivinder; and several cronies of the guru.

It’s fascinating reading that casts a dark light on the guru. Here’s a 16 mb PDF file:
Download Malav EOW Criminal Complaint

This complaint has formed the basis for a number of stories in the Indian financial press (see here, here, and here). Now, obviously Gurinder Singh and the other people named in the complaint will have an opportunity to respond to the allegations of illegality.

But the complaint is very much in line with comments left on this blog from 2010 to 2014 by someone in the know. I shared their 27,000 words in “Devastating criticism of Gurinder Singh Dhillon by a RSSB insider.” So this is independent confirmation that the general tenor of what Malvinder Singh alleges in his complaint is true.

I strongly recommend reading the criminal complaint in full. Though the stories in the Indian financial press accurately reflect what is in the complaint, there’s additional details in the complaint. And it is well-written in what I assume is the style of Indian legal documents of this sort.

Here’s screenshots of parts of the complaint that struck me as particularly important, along with my comments on them.

My comments on the complaint obviously don’t make complete sense unless the complaint itself is read also. But I want to share my comments on the parts of the complaint that I felt were most important, as they provide a good overview of how Malvinder Singh claims the RSSB guru was involved in financial misdeeds.

Sunil Godhwani was the guru’s right-hand-man/close advisor for many years. Control of companies owned by the Singh brothers passed to Godhwani at the request of Gurinder Singh. This is the first mention of how Malvinder Singh viewed the guru as a spiritual guide, father figure, and mentor. Malvinder and Shivinder are initiates of Gurinder Singh, I’m pretty sure.

…This excerpt talks about how Godhwani wasn’t running the companies on his own, but was in “consultation and conspiracy” with Gurinder Singh to cheat Malvinder.

…To understand this excerpt, we need to remember that the RSSB guru is considered by devotees to be God in human form. Hence, his advice and guidance can be trusted as divine. Malvinder says that he trusted Gurinder as his spiritual guru and believed “he can do no wrong.” Almost certainly he can, though, as we’ll see in the next sections of the complaint.

…This is a central focus of the criminal complaint. Shivinder is alleged to have spent a lot of time at the Dera (RSSB headquarters) working on a conspiracy to take money from RHC (a holding company formed by the Singh brothers with many subsidiaries) and shift the money to the guru, his relatives, and others — leaving RHC with no assets but only liabilities, which obviously hurts Malvinder and other RHC shareholders.

…Via an audit, Malvinder learns that RHC is debt-ridden and wasn’t a “going concern.” This leads him to investigate what happened. He learns that his brother, Shivinder, hasn’t engaged in any sort of normal business practices, which the complaint argues shows the fraudulent intent of acquiring various companies held by RHC.

…The complaint says that Malvinder learned that the RHC companies had loaned 1006 crores, which seems to be about $142 million US dollars, to Gurinder Singh, the guru’s family, and other close associates of the guru.

…After listing the exact amounts of RHC loans that total to the $142 million, the complaint alleges that Godhwani, in collusion with Shivinder and Gurinder Singh, “intrinsically intertwined” the finances of the Dhillon family with the finances of the companies — which, as noted above, had shareholders whose interests weren’t served by taking money from RHC to give to the Dhillon’s.

…Here’s one of the motives (maybe the main motive) of Shivinder going to such lengths to funnel money into the pockets of Gurinder Singh Dhillon and his family. The guru had promised to make Shivinder the head of RSSB, taking Gurinder Singh’s place, in exchange for forgiveness of the debts owed to RHC by the guru.

…This part of the complaint says that Shivinder, in connivance with Gurinder Singh, his family, and close associates fraudulently acquired six companies in order to hide from RHC shareholders what was going on, and to shield the people who had gotten loans from RHC from having to repay the money.

…Shivinder agrees to sign a “family settlement” that absolves Gurinder Singh Dhillon of wrongdoing or criminality. But Malvinder has objections to this, as detailed in some emails included in an appendix to the complaint. Again, Malvinder alleges that his brother, Shivinder, agreed to this “in his greed to become the next spiritual head of the Radha Soami Satsang Beas.”

…When Malvinder refuses to sign the settlement agreement, things get really nasty. Malvinder says that Gurinder Singh threatened that he would be eliminated by people from the Radha Soami Satsang, and warned him that the guru is a powerful person who has friends in high places.

…Malvinder states that he has recordings of the death threats made by Gurinder Singh and can make them available as and when desired. He also has received “veiled innuendos and threats” from other members of RSSB. Not surprisingly, this has put Malvinder “under immense mental pressure and trauma.”

He’s fearful for his life, saying that if anything happens to him this will be at the “behest of Sh. Gurinder Singh Dhillon and the other accused and those working under his influence.”

This is amazing. The Radha Soami Satsang Beas guru, who supposedly is a spiritual leader, is making death threats against his cousin because Malvinder won’t agree to forgiving hundreds of millions of dollars of loans illegally made to Gurinder Singh Dhillon, his family, and close associates.

How anybody can still believe in the divinity of the guru is beyond me.

…Here the complaint says that Shivinder Singh has refused to try to recover the loan money as part of “his evil design to effectively try and write off the debt of the Dhillon Family.”

…This isn’t a victimless crime, because Fortis Healthcare will be affected, diluting the value of shares owned by investors, defrauding the public, and adversely impacting public confidence.

…Lastly, Malvinder asks that a FIR (First Information Report) be filed that sets the wheels of justice in motion. It’ll be interesting to see how this complaint fares in the Indian legal system. I’m sure there will be more twists and turns in this drama.

Well, the new twist is the forensic audit ordered by the Delhi High Court. It sure seems that the financial transactions described in Malvinder Singh’s legal complaint will be part of the forensic audit, since a prime goal is to understand how the assets of Malvinder and Shivinder Singh were dissipated. Here’s an informative graphic that I included in my previous post about the flow of money into the hands of Gurinder Singh Dhillon and his family.

Note that Religare (the “R” in the companies shown at the top of the graphic) and Fortis transactions will be examined in the forensic audit. So this should go a long way toward making more clear how the RSSB guru and his family were involved in the dissipation of the Singh brothers assets.