The Delhi High Court on Friday asked brothers Malvinder and Shivinder Singh, erstwhile promoters of Fortis Healthcare Ltd (FHL), not to sell any assets without the court's approval. The Court also froze the brothers' bank accounts and asked them to disclose all transactions (including gifts) in the past since 2016.
This was the first time the brothers appeared before the court in the Daiichi case for cross-examination. The court asked them to file for insolvency if they did not have money. "You cannot keep away information on money from the court," the judge said.
Meanwhile, the high court on Friday refused to stay the extra-ordinary general meeting (EGM) of FHL on August 13 that has been called to seek shareholder nod for the IHH deal. Experts, however, felt that while this cleared the decks for the Fortis-IHH deal, for now, one could expect further legal twists and turns before the open offer (by IHH to pick up 26 per cent stake in FHL) commences on September 7.
The single-judge Bench on Friday asked the brothers to disclose details of all the assets of Religare and Fortis and how they had sold or gifted them since 2016 when Japanese drugmaker Daiichi had won the Singapore court arbitral award against the Singh brothers on the Ranbaxy deal.
The Daiichi counsel argued that the bank accounts of the Singh brothers be frozen in order to maintain the status quo. Daiichi argued that the Singh brothers had diluted assets during the course of the trial. More than 30 million unencumbered shares had been sold during 2017, Daiichi argued.
The counsel said that while the brothers had stepped down from FHL in February, they controlled RHC Holdings and Oscar Investments even afterwards.
On the other hand, the Singh brothers' counsel argued that they were trying to get an equity investor. Malvinder and Shivinder Singh could not be reached immediately for a comment. Fortis Healthcare, too, did not offer any comments on the development.
The HC asked Malvinder Singh not to sell his Singapore property, which is currently mortgaged with banks.
The hearing was adjourned for September 5.
In the last hearing on August 1, the single-judge Bench had observed that "things are getting out of hand". Coming down heavily on the brothers, Justice Rajiv Shakdher had then noted that they would have to cough up arbitration award money "by any means" or go behind bars. "Wherever you have to get it (money) from, you get it. You can't take court for a ride," the judge had said.
The Japanese pharma major, which won an arbitration award against the Singh brothers, moved the court seeking an injunction on the FFHL stake sale to IHH Healthcare. A similar application was moved in March this year when Fortis and TPG-backed Manipal Hospital decided to merge their business.