Business

Former Ranbaxy promoters guilty of contempt of court

Malvinder Singh and his brother Shivinder Singh inside a court premise in New Delhi. File Photo.   | Photo Credit: R.V. Moorthy

The Supreme Court on Friday held former Ranbaxy promoters Malvinder and Shivinder Singh guilty of contempt for violating its order that had asked them not to divest their shares in Fortis Healthcare Limited.

 The court had earlier asked the Singh brothers to give it a plan as to how they would honour the arbitral award of ₹3,500 crore granted by a Singapore tribunal against them in favour of Japanese drug manufacturer Daiichi Sankyo.

 A bench, comprising Chief Justice Ranjan Gogoi and Justice Deepak Gupta, held them guilty of contempt of court and said that they had violated its earlier order by which the sale of their controlling stakes in Fortis Group to Malaysian firm IHH Healthcare was put on hold.

 The Japanese firm had filed a contempt petition against them, alleging that execution of their arbitral award had been in jeopardy as the Singh brothers disposed of their controlling stakes in the Fortis Group to the Malaysian firm.

Daiichi had bought Ranbaxy in 2008. 

Later, it moved the Singapore arbitration tribunal, alleging that the Singh brothers had concealed information about their company facing probe by the US Food and Drug Administration and the Department of Justice, while selling its shares.

A tribunal in Singapore had passed the award in favour of Daiichi.

Daiichi had to enter into a settlement agreement with the U.S. Department of Justice, agreeing to pay $500 million penalty to resolve potential, civil and criminal liability.

The company had then sold its stake in Ranbaxy to Sun Pharmaceuticals for ₹22,679 crore in 2015.

A tribunal in Singapore had passed the award in favour of Daiichi.

The high court had on January 31, 2018 upheld the international arbitral award passed in 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 ₹9,576.1 crore. Sun Pharmaceuticals Ltd had later acquired the company from Daiichi.

Daiichi had moved the high court 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 last year, the Supreme Court had dismissed he Singh brothers’ appeal against the high court verdict upholding the international arbitral award, saying it was not inclined to interfere with it.

The Supreme Court had on March 14 asked the brothers to submit a concrete plan for paying ₹3,500 crore to Daiichi Sankyo as directed by the Singapore tribunal.


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Printable version | Jul 30, 2021 12:03:21 PM | https://www.thehindu.com/business/sc-holds-former-ranbaxy-promoters-malvinder-shivinder-singh-guilty-of-contempt-of-court/article29980528.ece

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