SC Asks Ex-Ranbaxy Promoters to Apprise it of Complying with Rs 3500 Crore Arbitral Award

The Supreme Court Thursday asked former Ranbaxy promoters Malvinder Singh and Shivinder Singh to submit a concrete plan for paying Rs 3,500 crore to Daiichi Sankyo as directed by a Singapore tribunal. The top court asked the Singh brothers to consult their accountants as also financial and legal advisors and apprise it by March 28. The Japanese firm has filed a contempt plea against the Singh brothers, saying that it was promised some shares of Fortis Healthcare by them and sought the recovery of Rs 3,500 crore as directed by the tribunal. Calling them “flag bearers” of the Pharmacare industry of the country, a bench headed by Chief Justice Ranjan Gogoi said that it does not look good that they are in the court. “It is not about individual’s honor but it doesn’t look good for the country’s honor. You (Singh brothers) were the flag bearers of the pharmacare industry and it doesn’t look good that you are appearing in court. Pay your debts and come out of this,” said the bench, also comprising justices Deepak Gupta and Sanjiv Khanna. It asked them to appear before it on March 28 and submit the plan, saying “hopefully it will be the last time you are appearing in the court”. At the outset, senior advocate Fali S Nariman, appearing for Daiichi, said in its reply that Malvinder claimed he is honest and bona fide and would pay the outstanding at the earliest.

He added that the younger brother Shivinder, on the other hand, has stated that he has taken ‘Sanyas’ (renunciation) and become a ‘Sadhu’ (monk) and has nothing to do with the company. The bench asked the duo, present in the courtroom, to come forward and said, “tell us that are you not obliged under the law to comply with the award”. Both the brother’s nodded in their reply and Malvinder Singh said that he would pay the outstanding as early as possible. To this, the bench observed that one brother says he has renounced the world and the other says he is running the company. “Then show us, I am all the bona fide and tell us how you would comply with the award,” it addressed Malvinder. “If you have a decree pending against you, then renouncing the world would not matter to us,” the court said, turning to Shivinder. Senior advocate P S Patwalia, appearing for Shivinder said “he has now come back to the world on December 17”. The bench then told Shivinder that “your lawyer says you have come back to the world, now that you have come back to the world, please tell us how you plan to comply with the award”. The bench said that perhaps it is the first time they have appeared before the Supreme Court, to which both the brothers applied in affirmative. “You both consult your accountants, financial and legal advisors and tell us by March 28, how you plan to comply with the award. Hopefully it will be the last time you are appearing in the court,” the bench said and asked them to remain present in the court on the next date of hearing.

The apex court had earlier refused to pass any interim order on pleas relating to the sale of controlling stakes of Fortis Healthcare to Malaysian IHH Healthcare Berhad. The top court, on December 14 last year, had ordered status quo with regard to the sale of controlling stakes of Fortis Healthcare. “Status quo with regard to sale of the controlling stake in Fortis Healthcare to Malaysian IHH Healthcare Berhad be maintained,” the bench had said. The top court had also issued notices to the Singh brothers asking them to explain as to why contempt proceedings be not initiated against them for allegedly violating its earlier order by pledging the shares. The board of Fortis Healthcare had approved in July a proposal from IHH Healthcare to invest Rs 4,000 crore by way of preferential allotment for a 31.1 percent stake. The Malaysian IHH Healthcare Bhd became the controlling shareholder of Fortis Healthcare Ltd by acquiring a 31.1 percent stake in the company. Daiichi had bought Ranbaxy in 2008. Later, it had moved the Singapore arbitration tribunal alleging that the Singh brothers had concealed information that Ranbaxy was facing probe by the US Food and Drug Administration and the Department of Justice, while selling its shares. Daiichi had to enter into a settlement agreement with the US Department of Justice, agreeing to pay USD 500 million penalty to resolve potential, civil and criminal liability. The company had then sold its stake in Ranbaxy to Sun Pharmaceuticals for Rs 22,679 crore in 2015. – Business Standard

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