Daiichi moves contempt plea against Singh brothers in Supreme Court

Daiichi plea argues Singh brothers, Indiabulls created share encumbrances in violation of apex court order.

The former promoters of Fortis group are in for more trouble in the following weeks after the Japanese drugmaker Daiichi-Sankyo moved a contempt plea against the Singh brothers and Indiabulls in the Supreme Court (SC) alleging that the two created encumbrances on 1.2 million shares of Fortis Healthcare held by Fortis Healthcare Holding despite the court’s orders against it. The court will hear Daiichi-Sankyo’s plea on December 13.

The apex court had on February 15 allowed banks and financial institutions to sell shares of Fortis Healthcare pledged with them on or before August 31 by the Singh brothers. The court had then, however, said that there could be no fresh encumbrances created by Singh brothers and others and had directed maintenance of a status quo.

In its petition before the SC, Daiichi-Sankyo has alleged that the Singh brothers and Indiabulls had created fresh encumbrances for nearly 1.7 million shares of the total 2.3 million shares that were left after the top court’s order. Of these, while Indiabulls had created encumbrances for 1.2 million shares, the rest had either been created by Singh brothers or other third parties.

Daiichi had, in June, unsuccessfully appealed against a Delhi High Court (HC) order allowing Singh brothers to sell Fortis Healthcare shares based on a submission by them that the disclosed value of their unencumbered assets would remain unaffected. The value of unencumbered Fortis Healthcare shares and assets held by Fortis Healthcare Holding is estimated to be roughly around Rs 25 billion.

The petition moved by Daiichi-Sankyo will be heard along with a petition moved by Axis Bank against a Delhi High Court order which had turned down a plea by the bank for release of some money the Singh brothers owed them. 

Axis Bank, along with YES Bank, had approached the court with a plea that some amount of money be released to them as they had an order from the debt recovery tribunal in their favour. The plea was, however, turned down by the court.