Religare Enterprises (REL), promoted by Malvinder Singh and Shivinder Singh, on Wednesday informed the Delhi High Court that sale of its healthcare insurance business is unlikely to happen this year as it is still awaiting the nod from the Insurance Regulatory and Development Authority of India (Irdai). The financial services company told justice Jayant Nath that it is still awaiting regulatory approval required for any stake sale in its insurance arm – Religare Health Insurance Co. The statement came in response to the court’s query, asking Religare’s promoters and their two companies – RHC Holding and Oscar Investments – to disclose the time line for the completion of sale of their health insurance arm Religare Health to venture capital firm True North.
However, the HC refused to pass any order on Daichii’s application that had sought to block REL from giving its capital markets subsidiary money to pay back a loan from Axis Bank. The Japanese pharma giant had asked the HC to stop implementation of a recent shareholder resolution of September 11 passed by REL to give Rs 500 crore to Religare Capital Markets to repay a loan by Axis Bank that is falling due. REL in April 2017 had announced sale of Religare Health Insurance and said it expected around Rs 1,100 crore from the sale. Around Rs 500 crore from this sale would allegedly be diverted to pay back Axis Bank. This, according to Daiichi, “brazenly” violates orders of the HC which had restrained Singh brothers from changing the status of unencumbered assets so as to secure a foreign arbitration award in its favour.
A Singapore tribunal had last year ordered the Singhs to pay the Japanese drugmaker Rs 2,562 crore in damages for concealing information regarding wrongdoing at Ranbaxy while selling it for $4.6 billion in 2008. Along with interest and legal fees, the total liability has been pegged at Rs 3,500 crore.
This was opposed by Singh brothers and others, saying Daiichi’s attempt to block implementation of the resolution was uncalled for as REL was not even party to the Japanese firm’s arbitration. Earlier, Daiichi also tried to block the Singhs from selling their controlling stake in Fortis Healthcare.
Earlier this month, the National Company Law Tribunal too declined to stay the shareholder resolution passed by REL to give Rs 500 crore to Religare Capital to repay the bank loan. This was after institutional investor India Horizon Fund, which has a 5.59% stake in REL, with the support of IDBI Trusteeship Services, had sought immediate dissolution of the board and the management of REL and also asked for appointment of an administrator until a new board is set up, a forensic audit and reversal of alleged fraudulent transactions by the majority shareholders. The matter is fixed for hearing on November 8.