Delhi High Court has told the Singh brothers to furnish assurance that it will get Rs 3,500 crore in case the damages are awarded to Daiichi Sankyo but has not put a stay on their plans to proceed with selling stake or infusing more capital into their businesses
The Delhi High Court has told former Ranbaxy promoters, brothers Malvinder Singh and Shivinder Singh, to declare the value of their unencumbered shareholdings in various group companies by February 8, in the ongoing dispute with Japanese drugmaker Daiichi Sankyo.
It has told the Singh brothers to furnish assurance that it will get Rs 3,500 crore in case the damages are awarded to Daiichi Sankyo.
However, the court has not put a stay on Singh brothers’ plans to proceed with selling stake or infusing more capital into their businesses.
Daiichi Sankyo has also been allowed to access previous asset declarations by the Singh brothers on condition of maintaining confidentiality.
The court will hear the case next on March 14. It will further hear on March 27 the case in which Daiichi Sankyo is seeking Rs 3,500 crore from Singh brothers towards award for damages related to regulatory penalties paid on behalf on Ranbaxy.
Daiichi Sankyo had acquired a majority stake in Indian drugmaker Ranbaxy Laboratories Ltd – then promoted by the Singh brothers – for Rs 22,000 crore in 2008.
However, soon after, the Indian company came under the scrutiny of the United States Food and Drug Administrator for non-compliance with the manufacturing standards for exporting drugs to the US. The company faced huge fines and sharp erosion in valuation.
Daiichi Sankyo – the new owners of Ranbaxy – agreed to pay $500 million to settle a lawsuit and the US federal charges, but sought legal recourse to recover the amount from previous promoters – the Singh brothers. Earlier last year, a Singapore tribunal ordered the Singh brothers to pay $385 million to Daiichi Sankyo towards compensation.
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The Japanese company moved the court again after that – this time in India – seeking to freeze of Singh brothers’ assets in order to be able to recover its compensation award.
Earlier last week, the Delhi High Court had accepted Daiichi Sankyo’s plea to hear an application to block a proposed sale of shares in Indian hospitals chain Fortis Healthcare by the Singh brothers, after reports that TPG Capital plans to buy controlling stakes in Fortis Healthcare and SRL-Fortis Malar Hospitals for Rs 3,000 crore.
The Delhi HC has accepted a commitment from the Singh brothers that they will pause their plans and will not pursue any stake sale in Fortis until the next hearing on January 23. Singh brothers had contended that they are not selling any stake, but are merely looking to infuse capital into the company.
It must be noted that Daiichi Sankyo is no longer the owner of Ranbaxy. It sold the company to another Indian pharmaceutical giant Sun Pharma for $3.2 billion in 2014.