HC asks Malvinder Singh to deposit S$3.5 million
Former Ranbaxy promoter told to deposit money that he earned by selling his shares in a company in violation of the court’s direction
The Delhi high court on Wednesday directed former Ranbaxy Laboratories Ltd promoter Malvinder Singh to deposit with it 3.5 million Singapore dollars (₹18.23 crore) that he had earned by selling his shares in a company in violation of court direction.
Justice Rajiv Shakdher said he had no doubt Malvinder Singh had violated the court’s February 19 directions, ordering him and his brother Shivinder not to sell their assets.
Wednesday’s order came after the court was informed by counsel for Malvinder, who was present in the court, that his 4.5 million equity shares in Religare Healthcare Pvt. Ltd were sold in Singapore in April. The court was informed that Malvinder had received 3.5 million Singapore dollars by selling the shares and that the two brothers had used the money to pay the mortgage for an apartment in Singapore and avoid defaulting on their payments.
The court was hearing a petition by Japanese pharma major Daiichi Sankyo, which was seeking execution of the ₹3,500 crore Singapore tribunal arbitral award won by it in April 2016.
Daiichi’s counsel contended that Malvinder was in contempt of the court’s directions by which the two brothers were directed on February 19 to maintain the status quo on the assets they have disclosed during the hearings. The court restrained the brothers and 12 others from selling or transferring their shares or any movable or immovable property as disclosed by them before the high court.
“Undoubtedly there had been disobedience of the directions of the court. For the moment respondent 1 (Malvinder) is directed to deposit the money received by him upon sale of these shares with the registry of this court,” the judge said.
The court, during a hearing that last over two hours, directed that the amount be deposited within four weeks. On being informed that the local commissioner, appointed by the court, has sold shares of the Singh brothers in listed companies, the judge said that ₹9.2 crore received from the sale should be released to Daiichi. The court, however, asked Daiichi to file an affidavit stating that if orders are passed in future to re-deposit the money, they will be complied with. The court turned down a plea by several private banks, including Yes Bank and Axis Bank, to whom the Singhs owned money, that some amount should be released to them.
The high court had on August 10 restrained the Singh brothers from operating their bank accounts in India or abroad and selling any property. It had directed the brothers and their firms RHC Holding Pvt. Ltd and Oscar Investments Ltd to disclose the bank account details. The court had also recorded on oath the statements of the brothers in which they were asked questions ranging from the number of bank accounts they held in India and abroad, their balances, properties, sculptures and assets.
A Singapore tribunal had in April 2016 passed the award in Daiichi’s favour holding that the brothers had concealed information that their company was facing a probe by the US Food and Drug Administration and the Department of Justice while selling its shares.
The high court on January 31 upheld the international arbitral award passed in the favour of Daiichi and paved the way for enforcement of the 2016 tribunal award against the brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for ₹9,576.1 crore.
Sun Pharmaceuticals Ltd had later acquired the company from Daiichi. It had, however, said that the award was not enforceable against five minors, who were also shareholders in Ranbaxy, arguing they cannot be held guilty of having perpetuated a fraud either themselves or through any agent.
Daiichi had moved the high court seeking directions to the brothers to take steps towards paying its ₹3,500 crore arbitration award, including depositing the amount. It had also urged the court to attach their assets which may be used to recover the award.
On February 16, the Supreme Court had dismissed Singh brothers’ appeal against the HC order upholding the international arbitral award. Singh brothers’ counsel had argued that the award granted consequential damages which were beyond the jurisdiction of the arbitral tribunal and the award cannot be enforced under the provision of the Arbitration Act. They had claimed that Daiichi was fully aware of all facts and still chose to retain the Ranbaxy shares, instead of terminating the agreement.