The Delhi High Court on August 1 directed Malvinder and Shivinder Singh to appear in person for the next hearing on August 10 in a case related to enforcement of ₹3500 crore arbitration award by Japanese drug maker Daiichi Sankyo. This would be the first time that the Singh brothers would appear in court in the Daiichi-Ranbaxy case, which has been going on since May 2016. The summons was issued as the court was not satisfied with the information provided by Singh brothers about the status of their assets. The court is trying to ascertain whether these assets cover the funds required to satisfy the Japanese drug maker’s award. Earlier, the court had sought details from Singh brothers of all their unencumbered assets and wanted a chartered accountant to be appointed to give valuation of the assets. Justice Rajiv Shakdher, who is hearing the matter, told the Singhs’ counsel that if the brothers do not have sufficient funds to satisfy the award, they should declare themselves insolvent and go behind bars. “Have seen and heard enough, things are getting out of hand,” the judge vented his frustration.
A Singapore tribunal had awarded Daiichi the ₹3500 crore arbitration award in April 2016, on the grounds that the brothers made false claims in a self-assessment report and fraudulently misrepresented and concealed the genesis, nature and severity of the US regulatory investigations of Ranbaxy when Daiichi bought their 34.82 percent stake for USD 2.4 billion in 2008. Daiichi earlier filed a petition seeking to block the Fortis-IHH Healthcare deal. Daiichi in its application contended that the implementation of the Fortis-IHH transaction will contravene orders issued by this honorable court, the honorable Supreme Court of India as well as significantly defeat the execution of the award in India. This includes orders to maintain the value of unencumbered assets that two holding companies of the Singhs’ disclosed to court. While the court has not passed orders to block the Fortis-IHH deal, it suggested that it would intervene if the transaction was found to violate earlier court orders.
In the hearing Fortis told the court that Singh brothers are no longer directors in Fortis and steps are underway for their depromoterization and board resolution in this regard has already been passed. Singh brothers hold around 0.63 percent stake in Fortis. Fortis said it is neither a party in the arbitration proceedings nor is a judgment debtor. In a separate development, Fortis said it got a legal notice from Malvinder Singh under the Insolvency and Bankruptcy (IB) Code demanding ₹46.11 crore alleging that it was due under employment agreement. Fortis said it replied to the notice stating that the said demand is illegal and not payable. Fortis added that it has sent a legal notice to Malvinder for recovering ₹20 crore with respect to his employment contract which in invalid. – Money Control