SC stalls Fortis sale over Daiichi's pleas against Singh brothers

Fortis Healthcare's shares fell by almost 14 per cent following the SC order putting the company's sale on hold

The Supreme Court on Friday put on hold the sale of Fortis Healthcare following Japanese drugmaker Daiichi-Sankyo's contempt plea against the Singh brothers and Indiabulls, 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 apex court's decision resulted in Fortis Healthcare's shares dropping as much as 14 per cent to Rs 130 apiece on the National Stock Exchange (NSE) in the intra-day trade. On a year-to-date (YTD) basis, the stock has slipped 5.5 per cent. At 11:35 am, the stock was trading at Rs 142.60, down 5.94 per cent.

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.