RHC holdings case: Daiichi moves NCLT seeking stay on insolvency proceedings

By: | Updated: September 19, 2018 5:32 AM

Japanese drug major Daiichi Sankyo on Tuesday moved the National Company Law Tribunal (NCLT) to stay the insolvency proceedings against RHC Holding initiated by HDFC Bank.

RHC Holding is the holding company through which the Singh brothers had made the sale of Ranbaxy to Daiichi. (Reuters)

Japanese drug major Daiichi Sankyo, which is in court to recover Rs 3,500 crore from former Ranbaxy promoters Malvinder and Shivinder Singh as part of the arbitration award by a Singapore tribunal, on Tuesday moved the National Company Law Tribunal (NCLT) to stay the insolvency proceedings against RHC Holding initiated by HDFC Bank.

RHC Holding is the holding company through which the Singh brothers had made the sale of Ranbaxy to Daiichi.

A two member NCLT bench asked both RHC Holding and its lender HDFC Bank to file a reply on the matter within a week. The matter will next be heard on October 4.

Daiichi Sankyo, which has filed an intervention application in the insolvency plea filed by HDFC Bank, said they have a decree to recover money against RHC Holding.

The Delhi High Court has already granted a status quo over sale of assets by RHC Holdings.

A tribunal in Singapore had passed the award in favour of Daiichi holding that the Singh brothers had concealed information.

It held that the Singh brothers did not share the information that the Indian company was facing probe by the US Food and Drug Administration and the department of justice while selling its shares.

The high court on January 31 had upheld the international arbitral award passed in the favour of Daiichi and paved the way for enforcement of the 2016 tribunal award against the brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for Rs 9,576.1 crore. Sun Pharmaceuticals had later acquired Ranbaxy from Daiichi.

Daiichi had moved the high court seeking direction to the brothers to take steps towards paying its Rs 3,500-crore arbitration award, including depositing the amount. It had also urged the court to attach their assets, which may be used to recover the award.

The brothers have appealed in Singapore against the arbitration award.

Meanwhile, on September 5, the Delhi High Court asked Malvinder Singh to deposit the sale proceeds of around S$3.5 million of his shareholding in Singapore-listed Religare Health Trust within four weeks. It also barred him and and his brother Shivinder Singh from moving any assets abroad and directed the freezing of their shares in Best Healthcare that owns the Fortis trademark.

The court also directed the release of Rs 9.38 crore received by them from the sale of their shares in listed companies towards part payment of Daiichi Sankyo’s Rs 3,500-crore award.

The court’s direction came because the brothers had disobeyed its order passed in February to maintain status quo on their assets and shareholding in companies.

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