The Delhi High Court has prohibited brothers Malvinder Singh and Shivinder Singh from operating their bank accounts in India and Singapore, and instructed them not to sell any assets without the court's approval. The court has also asked the former promoters of Fortis Healthcare Limited, popularly known as the Singh brothers, to disclose all their transactions, including gifts, since 2016. Companies owned by the Singh brothers, RHC Holding Pvt Ltd and Oscar Investments Ltd were also asked to disclose their bank account details during the proceedings.
The single judge bench of Justice Rajiv Shakdher instructed the brothers to submit the gift deed of an artwork worth Rs 7.59 crore that Malvinder gifted to his daughter last year, title document of their Singapore apartment and any other bank details. The plea by the counsel of the brothers that they be allowed to file these details in a sealed cover was rejected by the court.
Malvinder Singh told the court that the apartment in Singapore was mortgaged to DBS Bank and is about to be sold. In response to this, the court ordered him not to finalise the deal without its prior approval.
On the statement by the Singh brothers' counsel that they do not have any money, the bench asked them to file for insolvency. "If they don't have money, why don't they declare themselves insolvent. It's simple. The best way to protect themselves is that they go for insolvency," Justice Shakdher said.
Daiichi Sankyo had approached the court seeking execution of the Rs 3,500 crore arbitral award passed in its favour against the Singh brothers in the Ranbaxy deal. In the previous hearing, the court had directed the brothers to appear before it in person so that they can be questioned as to how they were going to pay the Tokyo-based pharma major.
The court, however, has allowed the extraordinary general meeting (EGM) of Fortis shareholders on Friday to continue as scheduled. The meeting is meant to get shareholders' approval for the acquisition of the healthcare care business by Malaysia-based IHH Healthcare Berhad. Daiichi had moved the court to stay the EGM on grounds that removing the Singh brothers from the position of promoters will severe any connection between them and Fortis Healthcare, leaving the Japanese pharma firm with nothing.
In its plea, Daiichi had reportedly contended that the proposed transaction "will contravene orders issued by this honourable court, the honourable Supreme Court of India as well as significantly defeat the execution of the award in India". The Japanese company had further argued that the value of the unencumbered assets disclosed to the court by Singhs' two holding companies had to be maintained.
The next hearing in the matter will be on September 5.
A Singapore tribunal had passed the award in Daiichi's favour back in April 2016 on grounds that that the Singh brothers had withheld information that their company was facing probe by the US Food and Drug Administration and the Department of Justice while selling its shares.
The high court on 31 January had upheld the international arbitral award passed in the favour of Daiichi and paved the way for enforcement of the 2016 tribunal award against the brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for ?9,576.1 crore.
Sun Pharmaceuticals Ltd had later acquired the company from Daiichi. It had, however, said that the award was not enforceable against five minors, who were also shareholders in Ranbaxy, saying they cannot be held guilty of having perpetuated a fraud either themselves or through any agent.
Daiichi had moved the Delhi High Court seeking direction to the brothers to take steps towards paying its ?3,500 crore arbitration award, including depositing the amount. It had also urged the court to attach their assets, which may be used to recover the award.
On 16 February, the Supreme Court had dismissed Singh brothers' appeal against the high court verdict upholding the international arbitral award.
Singh brothers' counsel had argued that the award granted consequential damages which were beyond the jurisdiction of the arbitral tribunal and the award cannot be enforced under the provision of the Arbitration Act.
They had claimed that Daiichi was fully aware of all facts and still chose to retain the Ranbaxy shares, instead of terminating the agreement and returning them.
Edited by Vivek Punj with PTI inputs