Daiichi Sankyo approached the Delhi High Court on Monday to protest against the 80 percent stake sale of Religare Health Insurance by former Ranbaxy promoter's Malvinder and Shivinder Singh. The objection to the April 9 sale of Religare's insurance business with private equity fund True North Managers marks Daiichi's latest attempt at securing the assets of the Singh brothers for the realisation of a Rs 2,562 crore Singapore arbitration award in favour of the Japanese pharmaceutical major.
Senor advocate C A Sundaram began Monday's proceedings by claiming that the former Ranbaxy promoters had, by conducting the Rs 1,300 stake sale, brazenly violated the court's earlier orders which had directed them to apply to court before transferring any of their unencumbered assets on March 6. Highlighting the history of the case, Sundaram mentioned that Daiichi had from the very beginning, questioned of the activities of the Singh brothers and their ability to pay for the arbitral award. "Time and again, they have reiterated that there was no intention to sell unencumbered assets. Daiichi has been cheated through the violation of this assurance," said Sundaram in court.
In support of Daiichi's stance, Sundaram also mentioned how the issue of asset security had been examined by the court on several occasions in the past, after the Japanese company had highlighted significant discrepancies between asset declarations made by the former Ranbaxy promoters on affidavit, as compared to other sealed envelopes and auditor statements filed before the court. According to Sundaram, this fact had been carefully considered by the court - which had directed the Singh brothers to file appropriate responses to these allegations on the last date of hearing.
Reacting to the Sundaram's remarks, senior advocate Harish Salve, appearing on behalf of the Singh Brothers, mentioned that Monday's date had been fixed only for directions and that the introduction of such contentions by Daiichi, was unwarranted at this stage. "At some point it must be seen what this award is worth. We will move to vacate all these interim applications (to secure the assets of the Singh brothers), such that the matter can actually be heard," said Salve.
After hearing the submissions made, Justice Jayant Nath - who was hearing the matter for the first time since the change of rosters in the high court - listed the case for further arguments on April 24 and 26.
“We have complied with all the orders of the Hon’ble Court. The order is applicable only in respect to the unencumbered assets to parties to the litigation, namely RHC Holding and Oscar Investments. The operating listed entities of the group, including Religare, are not party to the litigation,” said a spokesperson of RHC Holding Private Limited.
The enforcement of the April 2016 arbitral award, along with an additional claim of Rs 1,000 crore in interest and lawyers' fees comes on the backdrop of actions initiated by Daiichi against the former Ranbaxy promoters in relation to a 2008 purchase of a majority stake in the Indian pharmaceutical enterprise. The Japanese company had alleged that the stake sale was made through the concealment and misrepresentation of critical information regarding US Federal Drug Administration and Department of Justice proceedings, which cost Daiichi $550 million in settlement fees in the year 2013.