Daiichi moves SC to restrain Fortis from transferring funds from IHH

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New Delhi | Published: January 18, 2019 4:30:40 AM

Japanese drugmaker Daiichi Sankyo has moved the Supreme Court seeking to restrain Fortis Healthcare from transferring any funds it has received from Malaysia’s IHH Healthcare to RHT Health Trust, Singapore, in which the former promoters of the hospital chain, Malvinder Singh and Shivinder Singh, had a substantial interest till 2017.

Daiichi Sankyo, sc, supreme courtThe Supreme Court had on December 14 put on hold the sale of controlling stake (31%) in FHL to the Malaysian company, on a contempt plea filed by Daiichi Sankyo against the Singh brothers.

Japanese drugmaker Daiichi Sankyo has moved the Supreme Court seeking to restrain Fortis Healthcare from transferring any funds it has received from Malaysia’s IHH Healthcare to RHT Health Trust, Singapore, in which the former promoters of the hospital chain, Malvinder Singh and Shivinder Singh, had a substantial interest till 2017.

It stated that FHL has received Rs 4,000 crore from IHH Healthcare in India and the same should not be used by the former to repurchase the assets of RHT Health Trust, Singapore. “The imminent threat and apprehension is that Rs 4,000 crore (received by FHL) is to be paid out to a trust in Singapore, namely RHT Trust, in which the Singh brothers and other judgment debtors had substantial interest till 2017,” the Japanese pharma major said.

“This will not only cause a definitive change in the status quo orders, but will also transmit the monies which ought to be given to Daiichi, outside the jurisdiction of the SC. Such an action, will render the Award which has attained finality, a mere paper decree. This is a ruse and a stratagem to prevent payment of the decretal amount. Thus, it is apparent that the attempt of FHL to re-purchase the assets of RHT Health Trust, is nothing but a ruse to transfer proceeds received from IHH, outside the jurisdiction of the SC and render the execution proceedings a nullity,” Daiichi told the apex court.

In case the transactions, especially the transfer of Rs 4,000 crore is allowed, it will cause grave prejudice to Daiichi and will simultaneously amount to violation of the orders of the SC and the Delhi HC, the application stated.

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The Supreme Court had on December 14 put on hold the sale of controlling stake (31%) in FHL to the Malaysian company, on a contempt plea filed by Daiichi Sankyo against the Singh brothers. The order for maintaining status quo till further orders of the apex court meant that IHH Healthcare, which had in July won the bidding war for Fortis with its `4,000-crore offer, will have to wait and it therefore couldn’t go ahead with its open offer which was scheduled to commence from December 18, 2018.

Meanwhile, Fortis Healthcare has sought modification of the December 14 order, saying “it is prejudiced and affected by it”. It said that the apex court had passed the order without it being a party to the contempt petition. “…the applicant is prejudiced and affected” by the said Order and thereby seeks intervention as a necessary party to the instant proceedings because the December 14 order is directly affecting its business, FHL stated.

Daiichi Sankyo had earlier moved a contempt plea against the Singh brothers and Indiabulls alleging that the two created encumbrances (fresh mortgages) on 1.2 million shares of Fortis Healthcare Holding despite the SC’s order against it. This was despite the companies giving numerous assurances and undertakings that their assets will be always available to satisfy the decretal amount as and when the stage arises and their shareholdings (encumbered and unencumbered) will not be alienated without informing the HC, Daiichi Sankyo had said in its contempt application.

Citing IHH’s press release dated July 13, 2018, Daiichi said that it is apparent from the disclosures that the acquisition of assets of RHT is an integral part of the transaction, that is now a subject matter of the order of December 14, and IHH will support FHL’s acquisition of RHT. The press release had stated that “it is the intention of IHH to have Fortis Healthcare and Fortis Malar continue to retain their listing status on the BSE. IHH is also supportive of Fortis Healthcare’s announced plan to acquire RHT Health Trust, which is listed in Singapore and currently has a portfolio of 12 clinical establishments, four greenfield clinical establishments and two operating hospitals”.

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