Singh Brothers And Their Legal Battles
For the last few years, former Ranbaxy promoters Malvinder Singh and Shivinder Singh, have been dealing with a number of legal battles in efforts to carry out business deals ranging from Fortis Heatlhcare, Religare Enterprises and SRL Diagnostics’ demerger.
Here is a brief summary to explain what are these litigations about and their current status:
Daiichi’s Arbitration Battle
In 2016, Japan’s Daiichi Sankyo won an arbitral award against the Singh brothers in a Singapore tribunal. The tribunal gave an award of Rs 2,500 crore in favour of Daiichi. The arbitration battle was in relation to their 2008 purchase of drug maker Ranbaxy from the then promoters Singh brothers.
Subsequently, in 2016, Daiichi approached the Delhi High Court seeking the enforcement of the same arbitral award. The Delhi High Court, after concluding the hearing, has reserved its verdict in this case.
The Fortis Healthcare Angle
While the plea for enforcement of the arbitral award was pending, Daiichi also approached the Delhi High Court to bar the Singh brothers from divesting their stake in Fortis Healthcare Ltd. so that the award can be enforced. As of June, the promoters held 42.96 percent in Fortis Healthcare.
Arguing against Daiichi’s plea, the Singh brothers gave an assurance to the high court that the 'value' of the assets will not change. In July this year, the Delhi High Court allowed them to sell their stake in Fortis Healthcare provided it does not bring any change in the value of their unencumbered assets.
The plea for the stay then traveled to the Supreme Court which has now ordered that a status quo be maintained as far the shares of Singh Brothers in Fortis Healthcare are concerned. The apex court also made this order applicable on the encumbered, unencumbered as well as the pledged shares.
Religare Enterprises And Its Legal Battles
Singh brothers promoted Religare Enteprises Ltd. is fighting legal battles at multiple forums.
On August 8 this year, Religare Enterprises notified the stock exchanges proposing an investment of Rs 500 crore in Religare Capital Markets Ltd.
This proposal was opposed by IDBI Trusteeship Services Ltd., an investor in Religare Enterprises, before the Bombay High Court. They argued that the Rs 500 crore loan liability falls on Singh Brothers and not Religare enterprises as per the agreement entered into by them.The court had declined to grant a stay and fixed the next date of hearing on September 29.
Another investor, India Horizon Fund Ltd. approached the Delhi bench of the National Company Law Tribunal arguing that the transfer should not be allowed to proceed. They filed a plea of mismanagement and oppression of minority shareholders and sought that the board of the company be replaced.The tribunal denied any interim relief but issued a notice to Religare Enterprises seeing a reply.
Japanese drugmaker Daichii too has filed a petition in the Delhi High Court to stop the proposed transfer on grounds of protecting the value of their arbitral award. The high court has not yet passed any order.
SRL Diagnostics’ De-Merger
SRL Diagonstics Ltd. is a part of the parent Fortis Healthcare group and the proposed demerger plans are pending for approval at the Chandigarh bench of National Company Law Tribunal. Their too, drugmaker Daichii has filed an intervention plea. Daichii has taken a stand that they must also be heard before any approval is granted to the demerger plans as it is related to protecting the value of arbitral award that they secured at the Singapore tribunal.
The tribunal is yet to decide on any of the issues on this case. The hearing is scheduled for October.