SEBI has taken note of massive funds diversion by financial services company Religare Enterprises to its erstwhile promoters Malvinder and Shivinder Singh.

The market regulator on Thursday ordered Religare Finvest and Religare Enterprises to recall loans worth over ₹2,300 crore that were diverted to promoters Singh brothers and 21 other entities after finding preliminary evidence of fund diversions. Religare Finvest is a subsidiary of Religare Enterprises (REL). At the end of December 2018, the Singh brothers were among the promoters of REL.

“It was observed that funds amounting to ₹2,315.09 crore had been diverted from the books of RFL for the utilisation of promoters and promoter group entities of REL,” SEBI said in its order.

The regulator has directed the two companies to “initiate steps to recall all the loans amounting to ₹2,315.09 crore,” along with due interest within three months.

Besides, the Singh brothers have been asked not to associate themselves with the affairs of REL and RFL till further directions.

SEBI said prima facie the role of RFL and REL in the alleged diversion of funds to entities related to the latter’s promoters — RHC Holding and ANR Securities — for the ultimate benefit of Shivi Holdings, Malav Holdings, Shivinder Mohan Singh and Malvinder Mohan Singh has been established.

Further, the watchdog noted that non-disclosure of funds routed by RFL through unrelated entities for the benefit of promoters and promoter group entities in the books of the company was to circumvent listing norms.

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