In a blow to Malvinder Singh and Shivinder Singh, the former promoters of Ranbaxy, one of the biggest pharma companies in India, the Delhi High Court today barred the two brothers from undertaking any stake sale in any of their current companies without getting a go-ahead from the court.
The court’s directions came on an interim application by Japanese conglomerate Daiichi Sankyo, which had in 2008 bought a majority stake in Ranbaxy. The company had moved court in January this year seeking orders restraining Singh brothers and their companies “from selling, alienating, disposing of or encumbering their movable and immovable assets in any manner whatsoever to the extent of the awarded amount (of Rs 3,500 crore)”.
In May 2016, the former Ranbaxy promoters had assured the High Court that they would keep assets secure to make the Rs 3,500-crore payment to Daiichi Sankyo.
The fine was imposed upon the Singh bothers by a Singapore arbitration court after it found them guilty of concealing information while striking the deal with the Daiichi Sankyo.
The Japanese company’s application in court came after reports of Malvinder and Shivinder looking to induct an investor in Fortis Healthcare. The Singh brothers have a majority shareholding in RHC Holdings — a private limited company. Listed companies like Fortis Healthcare and Religare, and unlisted companies including SRL Diagnostics, are controlled through RHC Holdings.
RHC Holdings told the court on Monday that as per its understanding, on January 23, it was “not directed by this honourable court to furnish details/particulars of the unencumbered assets held by them”.
It then added that Singh brothers’ understanding of the said order was that they were “required to establish that they held unencumbered assets, sufficient to meet the majority award, if the same was held enforceable in India”.
On this, the court clarified that Malvinder and Shivinder “were in fact required to furnish the information relating to all unencumbered assets, both moveable and immoveable, and not merely investments and loans and advances”.
Singh brothers’ counsel then assured the court that they will submit complete details within one week.