SC refuses to allow banks to sell shares pledged by Singh brothers
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 unencompanies, 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 condition 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 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