Ex-Fortis promoter Shivinder Singh moves personal insolvency plea in NCLT

Former Ranbaxy-Fortis promoter Shivinder Mohan Singh moved a personal insolvency plea before the National Company Law Tribunal (NCLT), Delhi, on Monday.

 

Under Section 94 of the Insolvency and Bankruptcy Code, either the corporate debtor/borrower or personal guarantor may initiate the insolvency process.

 

The case came up for hearing briefly before Justice Mahendra Khandelwal and Member (Technical) Subrata Kumar Dash before being adjourned to May.

 

Singh told the tribunal that his liabilities have exceeded his assets. As most of his assets have either been disposed of or attached due to ongoing cases, he is unable to pay off his debts as a personal guarantor, Singh told the tribunal.

 

 

Background

 

The Supreme Court had, in September 2022, awarded six months' jail to brothers Malvinder Singh and Shivinder Singh in the Daiichi-Fortis case and ordered a forensic audit of the Fortis-IHH deal.

 

Disposing of Japanese drugmaker Daiichi Sankyo’s plea, the apex court had remanded the matter to the Delhi High Court while continuing the stay on IHH's open offer.

 

Malaysia's IHH Healthcare had, in 2018, acquired a 31 per cent controlling stake in Fortis by paying $1.1 billion in a bidding process overseen by an independent board. This triggered an open offer to acquire another 26 per cent of Fortis shares from the market. The open offer was not pursued as Daiichi had filed a plea against it.

 

Daiichi had challenged the Fortis-IHH deal to recover the Rs 3,600 crore arbitration award it had won in a Singapore tribunal against Fortis’ erstwhile promoters, brothers Malvinder Singh and Shivinder Singh.

 

Filing a petition against the Singh brothers and Indiabulls, Daiichi alleged that both parties had pledged 1.7 million shares of Fortis Healthcare, which were held by Fortis Healthcare Holding, despite the apex court forbidding it.

 

When the Singh brothers were selling Ranbaxy, the company was facing an investigation by the US Food and Drug Administration as well as the US Department of Justice.

 

The Singapore arbitration tribunal had found the brothers guilty of making false claims in a self-assessment report and of fraudulently misrepresenting and concealing the probe by the US into Ranbaxy when Daiichi bought their 34.82 per cent stake for $2.4 billion in 2008.

 

On February 15, 2018, the apex court allowed banks and other financial institutions to sell shares of Fortis Healthcare pledged with them by the Singh brothers before August 31. The court had also forbidden the Singh brothers from pledging any more shares in the company.