SC re­fuses to al­low banks to sell shares pledged by Singh broth­ers

Hindustan Times (Delhi) - - FRONT PAGE - Mint Cor­re­spon­dent feed­

NEWDELHI: The Supreme Court on Thurs­day re­fused to pass any in­terim or­der to per­mit banks to sell shares pledged by Singh broth­ers (Malvin­der and Shivin­der) in For­tis Health­care Hold­ing Pvt. Ltd.

A bench headed by jus­tice Ran­jan Go­goi said that the court would hear the case on mer­its at the next date.

Singh broth­ers have pledged shares worth ap­prox­i­mately ₹1,582.75 crore with Yes Bank Ltd, ₹390 crore with Axis Bank Ltd, ₹413 crore with ECL Fi­nance Ltd and ₹55 crore with RBL Bank Ltd.

On Au­gust 31, the apex court re­fused to per­mit Singh broth­ers, for­mer Ran­baxy pro­mot­ers, to sell their stake in For­tis Health­care Ltd. It also re­fused per­mis­sion to banks with whom the Singh broth­ers had pledged For­tis shares to do the same.

They were fur­ther re­strained from dis­pos­ing off any of their as­sets (en­cum­bered and unen- cum­bered) till the fi­nal dis­posal of the case.

Ja­panese drug­maker Dai­ichi Sankyo Ltd had chal­lenged a June 21 or­der of the Delhi high court al­low­ing the Singh broth­ers to po­ten­tially sell a stake in For­tis Health­care on the condi- tion that the dis­closed value of their un­en­cum­bered as­sets would re­main un­af­fected.

The or­der was passed to af­ford pro­tec­tion to Dai­ichi in terms of ready re­al­iz­able value of as­sets at a later stage. As a re­sult, the value of stake in the 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 amounts roughly 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.

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

The ar­bi­tral award came af­ter Dai­ichi al­leged that the Singh broth­ers had con­cealed cru­cial in­for­ma­tion while sell­ing Ran­baxy to it for $4.6 bil­lion in 2008. The Singh broth­ers are con­test­ing the award.

Sun Phar­ma­ceu­ti­cal In­dus­tries Ltd pur­chased Ran­baxy from Dai­ichi in a $3.2 bil­lion ac­qui­si­tion it com­pleted in 2015.

The case will be heard next on Oc­to­ber 25.


Ran­baxy pro­mot­ers Shivin­der Mo­han Singh (left) and Malvin­der Mo­han Singh

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