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

India Today - - THE BIG STORY | FAMILY FEUD - BY RA­JEEV DUBEY

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

VI­VAN MEHRA

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