Delhi HC allows Singh brothers to sell stake in Fortis with a rider

NEWDELHI: The Delhi High Court cleared on Wednesday the way for former Ranbaxy promoters Malvinder and Shivinder Singh to potentially sell a stake in Fortis Healthcare Ltd on the condition that the disclosed value of their unencumbered assets will remain unaffected.

The order was passed to afford protection to Japan’s Daiichi Sankyo in terms of ready realisable value of assets at a later stage. Hence, value of stake in holding companies, namely RHC Holding Pvt Ltd and Oscar Investments Ltd, would not change.

The value of unencumbered assets held by the Singh brothers in both these companies roughly amounts to the arbitration award of ₹2,500 crore handed down by a Singapore tribunal in 2016 in favour of Daiichi in relation to its 2008 purchase of a majority stake in Ranbaxy.

“Corporate transactions cannot be stalled at the behest of a decree holder, Daiichi in this case,” justice Sanjeev Sachdeva said, adding, irrespective of any transaction by the Singh brothers, the value of unencumbered assets could not be diminished.

RHC Holdings has an 80.67% in Fortis Healthcare Holding Pvt Ltd; Oscar Investment holds the remaining 19.33%. Fortis Healthcare Holdings in turn has a 52.5% stake in Fortis Healthcare.

Daiichi had alleged that the proposed stake sale by them in Fortis Healthcare would adversely affect recovery under the arbitral award.