The Delhi High Court today asked Fortis HealthcareNSE 3.16 % Ltd, which is going through the process of restructuring, to give its response on Japanese pharma major Daiichi Sankyo’s plea to maintain status quo of the assets of the hospital chain.
Justice Jayant Nath made Fortis Healthcare Ltd (FHL) a party in the fresh application of Daiichi after the FHL counsel said it was not a party to the Rs 3,500 crore execution suit filed by the Japanese firm against the former promoters of India’s Ranbaxy Laboratories Ltd — Malvinder and Shivinder Singh.
The court was hearing Daiichi’s plea to stall the restructuring process until it was paid the Rs 3,500 crore arbitration award by Fortis’ erstwhile promoters, the Singh brothers. The court listed the matter for further hearing on April 25.
The court also asked RHC Holding Pvt Ltd and Oscar Investments Ltd, companies controlled by the Singhs, to explain how they had arrived at the realisable value of shares in March 14, 2017 order.
It also asked the two companies to disclose their unencumbered shareholding in FHL through Fortis Healthcare Holdings Pvt Ltd (FHHPL), as on March 6 last year and today. RHC and Oscar hold shares in Fortis through FHHPL.
In its application, Daiichi, represented by senior advocate Arvind Nigam, has sought a direction to the Singhs and their companies to fulfil the undertaking given to the court in June last year, before initiating any scheme of restructuring or transaction involving FHL.
During the hearing, senior advocate P Chidambaram, appearing for FHL, argued that the company was not a party in the suit and no order can be passed against it. He said that the restructuring process would not be concluded any time soon and take some time as FHL would require several regulatory approvals.
He said that earlier FHHPL had 52 percent shares in FHL but today the holding company owned only 0.67 percent shares in Fortis Healthcare and 99 percent of FHL is owned by banks and other shareholders.
Senior advocate Rajiv Nayyar, appearing for the Singh brothers, said they should not be restrained from going abroad as they were not flouting any court order.
The high court had earlier ordered the attachment of all unencumbered assets of the two holding companies of the Singhs.
It had restrained the Singhs and others from selling or transferring their shares or any movable or immovable property. The brothers had disclosed their assets to the court in sealed covers in December 2016 and March 2017 during the pendency of Daiichi’s plea seeking enforcement of the 2016 arbitral award passed by a Singapore tribunal against them.
The Singapore tribunal had passed the award in favour of Daiichi holding that Singh brothers had concealed information that the Indian company was facing probe by the US Food and Drug Administration and the Department of Justice, while selling its shares.
The high court on January 31 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.
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, the Supreme Court had dismissed Singh brothers’ appeal against the high court verdict upholding the international arbitral award, saying it was not inclined to interfere with it.
The tribunal’s award had come after the Japanese company invoked arbitration clause against Singhs alleging that they concealed important information while selling Ranbaxy in 2008.
Source: Economic Times