Former MP Raj Grewal, two Sikh temples sued by lenders of $15M loan

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The growing saga of financial allegations around former MP and lawyer Raj Grewal has taken another surprising turn, as not only the former politician but two Sikh temples are named as defendants in a new lawsuit.

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The case filed last week by a pair of non-bank lenders alleges that RSG Law, the firm Grewal founded, represented the temples in Toronto and nearby Brampton as they jointly obtained a $15-million loan last year from SSMT Management Inc. and Oculus Mortgage GP Inc.

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The loan was guaranteed by Grewal, as well as by a man who is president of both “gurdwaras” and the treasurer of one of them, according to the lawsuit.

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Despite repeated promises, the law firm never registered the debt against one of the two temples, a standard requirement that would provide security for the lenders in the event of a default, the lawsuit charges.

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And, in fact, the seven-month mortgage had not been paid off by the end of the term in January, and the last monthly interest payment — which would have been about $300,000 — was made in April, the statement of claim filed by the lenders alleges.

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No statement of defence has been filed and none of the allegations has been proven in court.

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Simon Bieber, one of Grewal’s lawyers, told the National Post Wednesday that he understands “the issue is resolved.”

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Maria Naimark, one of the plaintiffs’ lawyers, declined to comment when asked if the case had already been settled, just days after being launched.

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The other defendants in the case did not respond to requests for comment.

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Balpreet Singh, a spokesman for the World Sikh Organization — the faith’s main Canadian association — said he didn’t know enough about the case to comment on it or its impact on the community, noting that statements of claim tend to be very one-sided.

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The case adds to a long list of legal actions that accuse Grewal, the firm he founded but no longer owns and associated lawyers of fraud, misappropriation of client funds and other wrongdoing in a series of real-estate transactions.

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In some cases, defendants have been accused of borrowing money against clients’ property without the property owners’ authorization, providing fake title insurance that fails to protect lenders and misusing client money in trust funds. Recently filed lawsuits estimate that about $200 million is in dispute.

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The Law Society of Ontario has also accused Grewal of financial transgressions, saying that to leave him practising law as its investigation proceeds would pose a “significant risk of harm to the public.” He has voluntarily given up his law licence pending a decision on the regulator’s request to suspend those credentials. The society has already suspended the licence of Davinder Khattra, the current head of RSG Law.

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But the involvement of non-profit religious organizations — which are subject to strict federal tax rules and in this case are close to the hearts of the area’s large Sikh community — would seem to add a new complexion to the situation.