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Sebi told us to recover Rs 403 cr from Singh brothers: Fortis to HC

FHL made the submission in a recent affidavit filed in an ongoing case by Japanese drugmaker Daiichi Sankyo against the Singh brothers and their firms

India  |  Fortis Healthcare  |  Ranbaxy Laboratories

Press Trust of India  |  New Delhi 

Sebi told us to recover Rs 403 cr from Singh brothers: Fortis to HC

Healthcare Ltd (FHL) informed the that Sebi has asked it to to recover Rs 403 crore from former Ltd promoters Malvinder and Shivinder Singh, who allegedly diverted funds of FHL and its subsidiary Hospital Ltd.

FHL made the submission in a recent affidavit filed in an ongoing case by Japanese drugmaker against the Singh brothers and their firms.

Daiichi moved the high court seeking execution of the Rs 3,500 crore a tribunal's arbitral award won by it in April 2016.

Against the backdrop of Daiichi's ongoing litigation seeking repayment of the amount by Singh brothers, FHL said that while passing any directions on discharge of claims owed by these persons and entities, the high court may also take into account the directions passed by Sebi and the corresponding interest of FHL upon any sums that are sought to be recovered.

FHL, in its affidavit filed before Justice Rajiv Shakdher, said it wanted to place on record orders passed by the Securities Exchange Board of (Sebi) in connection with an investigation carried out by it pertaining to alleged diversion of funds of FHL and its subsidiary, Hospital, by Singh brothers.

Sebi, in an ad interim ex-parte order of October 17, 2018, had directed that FHL take necessary steps to recover Rs 403 crore along with interest from the Singh brothers and various promoter within three months.

The market regulator had also directed Singh brothers and others not to dispose of or alienate any of their assets or divert any funds without its prior permission, till completion of the investigation.

In March this year, Sebi gave another order confirming the directions passed in the previous orders.

The high court on February 19, 2018 restrained the brothers and 12 others from selling or transferring their shares or any movable or immovable property as disclosed by them before the high court earlier.

The high court had on August 10, 2018 restrained the Singh brothers from operating their in or abroad and selling any property.

It had directed the brothers and their firms RHC Holding Pvt Ltd and Oscar Investments Ltd to disclose the bank account details.

A tribunal had in April 2016 passed the award in Daiichi's favour holding that the brothers had concealed information that their company was facing probe by the and the Department of Justice while selling its shares.

The high court on January 31, 2018 had upheld the international arbitral award passed in the favour of Daiichi and paved the way for enforcement of the 2016 tribunal award against the brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for Rs 9,576.1 crore. Sun Pharmaceuticals Ltd had later acquired the company from Daiichi.

It had, however, said that the award was not enforceable against five minors, who were also shareholders in Ranbaxy, saying they cannot be held guilty of having perpetuated a fraud either themselves or through any agent.

Daiichi had moved the high court here seeking direction to the brothers to take steps towards paying its Rs 3,500 crore arbitration award, including depositing the amount. It had also urged the court to attach their assets, which may be used to recover the award.

On February 16, 2018 the had dismissed Singh brothers' appeal against the high court verdict upholding the international arbitral award.

Singh brothers' counsel had argued that the award granted consequential damages which were beyond the jurisdiction of the arbitral tribunal and the award cannot be enforced under the provision of the Arbitration Act.

They had claimed that Daiichi was fully aware of all facts and still chose to retain the Ranbaxy shares, instead of terminating the agreement and returning them.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Tue, May 14 2019. 19:21 IST