TILL DEBT DO US PART
HOW THE BROTHERS MALVINDER AND SHIVINDER SINGH LOST RS 22,500 CR AND THEIR BUSINESS EMPIRE IN JUST OVER A DECADE
Even during the years when Shivinder Mohan Singh actively ran Fortis Healthcare, the board meetings were presided over by elder brother Malvinder Mohan Singh, the chairman of the company. Shivinder, the vice-chairman, never disagreed with Malvinder at the board meetings or in public. Indeed, he would withdraw whenever the chairman took a stand on an issue, say insiders.
Hence Shivinder’s move to sue Malvinder in the National Company Law Tribunal (NCLT) for alleged “oppression and mismanagement” on September 4 came as a huge surprise to many. But not to those in the know, those who had sensed trouble for a while. To be clear, a lot has changed between then and now. The brothers have lost nearly Rs 22,500 crore and control of one of India’s largest hospital chains, Fortis Healthcare, and one of India’s largest non-banking finance companies, Religare Enterprises, all in quick succession.
But what the world saw may just be a symptom of a deeper malaise as their relationship swung from one extreme to another. One day in June 2008, brothers Malvinder and Shivinder Singh had cash in hand of over Rs 9,500 crore from the sale of India’s largest pharmaceutical firm, Ranbaxy Laboratories. And just eight years later they were over Rs 13,000 crore in debt.
One day, the brothers were expressing solidarity with each other by issuing a joint statement, blaming former Religare CEO Sunil Naraindas Godhwani for their “debt load”; on another, Shivinder was announcing that he has broken off all business dealings with Malvinder.
One day, Shivinder was approaching the NCLT against Malvinder and Godhwani for alleged oppression, mismanagement and forgery. Another day, he withdraws the case invoking mother Nimmi Singh’s pleas to find a settlement moderated by family elders.
“Today, we have lost control of all our key businesses viz Fortis, SRL and Religare in our committed effort to repay our debts and also as a result of invocation of pledged shares by the banks. This has ultimately led to insignificant shareholding remaining with us in these businesses,” Malvinder and Shivinder Singh said in a joint e-mail response.
How the brothers lost Rs 22,500 crore and their empire is an intriguing tale of mishandling of money, naivete, blind trust—and now a trust deficit. The cast of characters includes the Singh brothers, their maternal uncle Gurinder Singh Dhillon and his family and Godhwani. Dhillon—best known as ‘Babaji’ or the ‘Saint of Beas’—is the spiritual guru of the influential Radha Soami Satsang Beas (RSSB) which has over two million followers and a vast land bank across the country. RSSB’s nearly 5,000 centres can accommodate between 50 and 500,000 people during congregations.
Once they received the Rs 9,576 crore worth of proceeds of the sale of Ranbaxy to Japan’s Daiichi-Sankyo in 2008, the Singh brothers paid nearly Rs 2,000 crore in taxes and loan repayments. Of the remaining Rs 7,500 crore, Rs 1,750 crore was invested to fund Religare’s growth; about Rs 2,230