The Supreme Court on Thursday clarified that its orders dated August 11, 2017, and August 31, 2017, restraining brothers Malvinder and Shivinder Singh from selling their shares in Fortis Healthcare will not apply to the shares that were pledged by them to banks. The August 31, 2017, Supreme Court order had restrained the Singh brothers from selling both encumbered as well as unencumbered shares. Encumbered shares are those that are pledged or offered as collateral to a lender.
With Thursday’s clarification from the apex court, banks can sell the shares pledged by the brothers with them to recover their dues.
However, the stay will continue on those shares that were pledged after August 11, 2017, according to the apex court’s order.
As of March 2017, around 85.78% of the shares were pledged by Fortis Healthcare Holding Private Limited, the promoter holding company of Fortis Healthcare.
The promoter’s stake in Fortis has fallen from 70.28% as on September 30, 2016, to 34.43% as on December 31, 2017.
Axis Bank and Yes Bank are the major lenders to Fortis with whom the shares have been pledged and they had moved the Supreme Court last year seeking permission to sell them to recover their dues. The brothers had pledged shares worth around Rs 1,580 crore and Es 390 crore with Yes Bank and Axis Bank, respectively.
The Supreme Court’s order last year had come on the petition of Japanese drug maker Daiichi Sankyo, which had appealed against the Delhi High Court’s order that had allowed the brothers to sell their shares in Fortis. Daiichi had moved the court to secure assets of the Singh brothers to realise the Rs 2,560-crore arbitration award it had won in Singapore last year against the brothers over its Ranbaxy deal.
In January, the Delhi High Court had allowed Daiichi to collect `3,500 crore award money from the brothers.