IHH Healthcare Berhad colluded with former Fortis promoters to buy controlling stake : Daiichi tells SC

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February 11, 2021 4:15 AM

Daiichi is just trying to obstruct the deal and trying to take out money, he alleged.

Senior counsel Mukul Rohatgi, appearing for Daiichi, told the bench led by Justice UU Lalit that the award, granted by the Singapore Tribunal against Singh brothers, has been in jeopardy as they had disposed of their controlling stakes in Fortis Group to IHH Healthcare.Senior counsel Mukul Rohatgi, appearing for Daiichi, told the bench led by Justice UU Lalit that the award, granted by the Singapore Tribunal against Singh brothers, has been in jeopardy as they had disposed of their controlling stakes in Fortis Group to IHH Healthcare.

Japanese drugmaker Daiichi Sankyo on Wednesday told the Supreme Court that Malaysian healthcare giant IHH Healthcare Berhad had colluded with former Fortis Healthcare promoters Malvinder Singh and Shivinder Singh to purchase 31% controlling stake in the hospital chain by “flouting” its and the Delhi High Court’s directions.

It also said that the arbitral award of Rs 3,500 crore, which with interest now stands at Rs 4,200 crore, can be recovered either by selling physical assets of the Malaysian company or its 31% stake in FHL. IHH had in July 2018 bought the hospital chain for Rs 4,000 crore by bidding for it.

Senior counsel Mukul Rohatgi, appearing for Daiichi, told the bench led by Justice UU Lalit that the award, granted by the Singapore Tribunal against Singh brothers, has been in jeopardy as they had disposed of their controlling stakes in Fortis Group to IHH Healthcare.

Despite giving several written assurances to the HC, they alienated their unencumbered shares while secretly finalising the deal with IHH, he added.
Daiichi had alleged that the brothers reduced stake of FHL from more than 40% in August 11, 2017 to less than 1% now and FHL has diverted the sale proceeds it received from IHH to re-purchase the assets of RHT Health Trust, Singapore, in which the Singh brothers allegedly had substantial interest till 2017. It further said that the share holding of FHHL, which is owned by the brothers, in FHL has been reduced from more than 40% before August 11, 2017 to around 0.2% now.

However, senior lawyer Harish Salve, appearing for Fortis, said that Daiichi had no claim over any assets of IHH Healthcare or Fortis Healthcare, as the arbitration award was passed against the Singh brothers, who no longer had any stake in either of the companies. Daiichi is just trying to obstruct the deal and trying to take out money, he alleged.

When the judges asked Singh brothers how did they alienate their stake in the healthcare chain despite status quo order from the SC and a total of five assurances given to the high court, senior counsel Kailash Vasudev, appearing for Malvinder, said that it was the banks and other financial institutions with which the shares were pledged, including the ones that were lying in depository accounts, that made the transfer.

The Supreme Court had in 2019 held Singh brothers guilty of contempt for violating its earlier orders that had restrained them from divesting their shares in FHL. However, it gave them one more chance to purge themselves of the contempt if each of them deposited Rs 1,170.95 crore. Both the brothers are in Tihar jail in the case filed by Religare FinVest — an arm of Religare Enterprises — for allegedly causing loss worth Rs 2,397 crore.

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