SC seeks Fortis Health response on Daiichi plea for stopping transfer of Rs 4,000 crore

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Updated: January 29, 2019 7:03:36 AM

It said that the apex court had passed the order without it being a party to the contempt petition.

This is a ruse and a stratagem to prevent payment of the decretal amount.

The Supreme Court on Monday sought response from Fortis Healthcare (FHL) and others on Japanese drug maker Daiichi Sankyo Company’s plea seeking to restrain the hospital chain from transferring `4,000 crore it has received from Malaysia’s IHH Healthcare Berhad to RHT Health Trust, Singapore, in which the former promoters of Fortis – Malvinder Singh and Shivinder Singh – had substantial interest till 2017.

It also issued notice to Daiichi on another application filed by Fortis Healthcare seeking modification of the December 14 order that put on hold the sale of controlling stake (31%) in FHL to the Malaysian company. FHL also wants to be impleaded in the case, saying the December order was directly affecting its business.

A bench led by Chief Justice Ranjan Gogoi while asking Daiichi, Singh brothers and others to file their replies to the cross-applications posted the matter for further hearing on February 6.
Daiichi stated that FHL has received `4,000 crore from IHH Healthcare in India and the same should not be used by the former to re-purchase the assets of RHT Health Trust. “The imminent threat and apprehension is that `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 `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.

The SC 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, had to wait and couldn’t have gone ahead with its open offer which was scheduled to commence from December 18.

Daiichi Sankyo is pursuing the enforcement of `3,500-crore arbitration award against the Singh brothers pronounced by a Singapore tribunal for concealing information regarding wrongdoing at Ranbaxy Laboratories while selling it to it for $4.6 billion in 2008.

Fortis Healthcare, on the other hand, 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.

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