Fortis Healthcare stock rises over 12% after promoters Malvinder Mohan Singh and Shivinder Mohan Singh resign

 BusinessToday.in        Last Updated: February 15, 2018  | 12:28 IST
Fortis Healthcare stock rises over 12% after promoters Malvinder Mohan Singh and Shivinder Mohan Singh resign

The Fortis Healthcare stock rose in early trade on reports that its promoters Malvinder Mohan Singh and Shivinder Mohan Singh have resigned as directors from the company's board following the Delhi High Court order upholding the Rs 3,500 crore arbitral award in favour of Daiichi Sankyo.At 12:29 pm, the stock was trading 12.09% or 15.25 points higher at 141.35 level in an otherwise falling market. The stock hit an intra day high of 157.05 level and a low of 123.10 level.

It is down 11.53% since the beginning of this year. On an yearly basis, the stock has fallen 28.71% on BSE.

The matter relates to international arbitral award of Rs 3,500 crore passed in favour of Japanese pharma major Daiichi Sankyo, which has alleged that the former promoters of Ranbaxy Laboratories had concealed information about proceedings against them by American food and drug department. A tribunal in Singapore had passed the verdict in favour of Daiichi holding that the former Ranbaxy promoters and brothers, Malvinder Singh and Shivinder Singh, had concealed information that the Indian company was facing probe by the US Food and Drug Administration and the Department of Justice, while selling its shares.

The Singh brothers have jointly tendered their resignation to the Board of Fortis Healthcare, which will discuss it in the meeting on February 13, the company said in a filing to the BSE.

"The members of the board are also requested to look into all inter-group transactions and distance the promoter group from Fortis Healthcare Ltd in a manner that enables continuity of the operations of the organisation and deliver on its mission of enriching and saving lives," the Singh brothers wrote in a letter.

The high court order paved the way for enforcement of the 2016 arbitral award passed by the Singapore tribunal against the Singh brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for Rs 9,576.1 crore.

Sun Pharmaceuticals later acquired the company from Daiichi. Daiichi had approached the high court in 2016 to seek the enforcement of Rs 2,562 crore Singapore arbitral award passed in April 2016, along with an additional claim of interest and lawyers' fees incurred in connection with the proceedings.

The tribunal's award had come after the Japanese company invoked arbitration clause against Singhs alleging that they concealed important information while selling Ranbaxy in 2008. Daiichi had entered into a settlement agreement with the US Department of Justice, agreeing to pay $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.

(With PTI inputs)

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