Malvinder Singh (in front) and Shivinder Singh

NEW DELHI: The government has ordered a Serious Fraud Investigation Office (SFIO) probe against Fortis Healthcare and Religare Enterprises, which are at the centre of a controversy involving accusations of misconduct against their promoters Malvinder and Shivinder Singh.

Separately, Fortis on Saturday said the Securities and Exchange Board of India had ordered an inquiry against it and had asked it to furnish information and documents.

The Singh brothers had recently quit the boards of the two companies. The move came days after the Delhi high court ruled that the Rs 3,500 crore arbitration award that Daiichi Sankyo won against the billionaire brothers for concealing facts about erstwhile Ranbaxy Laboratories was enforceable in India. Nearly a decade ago, the Singhs had sold their stake in Ranbaxy to the Japanese company, which subsequently exited from the venture.

A Religare spokesperson said, "The company has not received any communication, written or otherwise, from any government authority with regard to such a purported investigation and as such we have no knowledge of any investigation against the company."

A similar questionnaire sent to Fortis on Sunday evening remained unanswered although a company source said SFIO had not informed it about any investigation.

Sources told TOI that orders to refer the cases to SFIO were issued over the last few days. The move came amid reports that the promoters had diverted funds from Fortis, a charge that has been denied. Fortis, which runs a chain of hospitals, has not declared results as auditor Deloitte has refused to sign them amid differences over accounting issues. Operations of Fortis are being run by a management committee.

On Saturday, Religare had announced the appointment of three new directors and had also designated Ashok Mehta as the new CEO apart from fresh fund-raising of Rs 1,200 crore. In the past, the Reserve Bank of India had raised eyebrows over the functioning of the financial services company.

The ministry of corporate affairs, which oversees investigations, usually refers several cases to the registrar of companies with whom the entities are mandated to file returns. Only when the government sees major accusations does it refer the cases to the SFIO. Usually, such decisions are taken at the highest level.

In recent years, activity at the agency set up nearly 15 years ago has gone up with SFIO completing 87 investigations during 2016-17, compared to 60 a year before that and 39 in 2014-15. Till last March, it had filed 1,237 cases in various forums in the 312 cases probed by it.

