Fortis Healthcare: SC Pronounces 6 Months Jail Term to Singh Brothers; Orders Forensic Audit of Fortis-IHH Deal
Moneylife Digital Team 24 September 2022
The Supreme Court (SC), on Thursday, pronounced a jail term of six months to brothers Malvinder Singh and Shivinder Singh in a case filed by Daiichi Sankyo. The Japanese drug-maker had filed a case against the Singh brothers for concealing information regarding wrongdoing while selling their stake in Ranbaxy Laboratories Ltd in 2008.  
 
While ordering continuance of its stay on the open offer by Malaysia's IHH Healthcare Berhad for a 26% stake in Fortis Healthcare Ltd, the apex court asked the Delhi High Court to issue remands in the case. SC also ordered a forensic audit of the Fortis-IIH deal.  
 
Daiichi Sankyo has challenged the Fortis-IHH deal to recover Rs3,600 crore from the Singh brothers, the former promoters of Ranbaxy. In 2018, IHH acquired a 31% stake in Fortis Healthcare, triggering an open offer for another 26%. 
 
In a regulatory filing, Fortis Healthcare says, "...the proceedings before the Hon'ble Supreme Court have concluded with certain directions and the suo-motu contempt has been disposed-off. We are seeking legal advice to decide our future course of action." 
 
In January 2018, the Delhi HC ruled that the Rs3,500-crore arbitration award, that Daiichi Sankyo won against billionaire Singh brothers for concealing information about erstwhile Ranbaxy Laboratories, was enforceable in India. Daiichi Sankyo had filed the petition to enforce the arbitral award it had won in 2016 in the Singapore tribunal. It had argued that both Malvinder and Shivinder Singh concealed important information while selling Ranbaxy in 2008.
 
Earlier in June this year, the securities appellate tribunal (SAT) directed Malvinder Singh and Malav Holdings to deposit, within six weeks, 50% of the penalty amount imposed by market regulator Securities and Exchange Board of India (SEBI) in the Fortis Healthcare case. 
 
The order came after Mr Singh and others approached SAT against SEBI's order passed in April, whereby it had slapped a fine of Rs5 crore on Mr Singh—who was the promoter of Fortis Healthcare—besides Rs2.5 crore each on Malav Holdings, a company owned by Mr Singh, and Gagandeep Singh Bedi, the former chief financial officer of Fortis Healthcare. 
 
SEBI had also barred Malvinder Singh and his brother Shivinder Singh from the securities market for a period of three years. They have also been restrained from being associated as directors or key managerial personnel in a listed company or SEBI-registered intermediary of any market infrastructure institution (MII). 
 
The case relates to the Singh brothers, along with other entities, allegedly diverting funds from Fortis Healthcare Ltd for the ultimate benefit of RHC Holding Pvt Ltd—an entity indirectly owned and directly controlled by the erstwhile promoters.
Comments
iyerrajkumar
2 days ago
Good truth has to prevail in the end. Richness or any concept developed by the human mind does not matter.
saharaaj
4 days ago
with such gross defiance if SC is so mild no doubt is is laden with mountain of cases .. people gamble in approach .. if they know gamble will be costly SC will function efficiently
adityag
6 days ago
This is a mere slap on the wrist.
makhaik
7 days ago
Singh brothers ending up in Jail for a 6 month term still begs the question as to how will Daiichi Sankyo recover its Rs 3500 crore arbitration award amount
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