Daiichi moves Delhi HC for restraining dilution of assets by Singh brothers
Daiichi, in an application, sought to stall any sale by the Singh brothers as they were looking to rope in an investor in Fortis Healthcare
New Delhi: Japanese drug maker Daiichi Sankyo Co. Ltd approached the Delhi high court on Tuesday, seeking to restrain former Ranbaxy owners Malvinder Singh and Shivinder Singh from selling their assets, specifically Fortis Healthcare Ltd.
The Economic Times reported this in its Tuesday’s edition.
The case relates to enforcement of an arbitral award in proceedings initiated by Daiichi against the Singhs in relation to its 2008 purchase of a majority stake in Ranbaxy, then owned by the brothers.
The legal hurdle could hurt the prospects of the Singhs finding a strategic investor, even a majority one for Fortis. Mint has reported that private equity firms TPG Capital and KKR & Co. LP are both interested. Read more
Daiichi, in an application, sought to stall any sale by the Singh brothers as they were looking to rope in an investor in Fortis Healthcare and such a sale would dilute assets and hamper recovery of damages from the Singh brothers.
Assuring the court that there was no alienation of assets, the Singh brothers said: “There has been no parting with assets; however, some capital infusion is necessary for functioning of the company."
Justice S. Muralidhar, before whom the matter was brought, directed the Singh brothers to abide by their earlier undertaking to not sell any assets.
Daiichi’s counsel C.A. Sundaram told the court about the Singh brothers planning to sell their stake in Delicate Finvest and Fortis Healthcare.
“They have received an offer worth Rs3,000 crore for Fortis Healthcare," Sundaram added. These claims were denied by the Singh brothers who maintained that they had not parted with any of their assets.
The case will be heard next on 23 January.
The original arbitral award came after the Japanese company alleged that the Singh brothers had concealed crucial information while selling Ranbaxy to it for $4.6 billion in 2008. In response, a Singapore tribunal had ordered the brothers to pay Rs2,562 crore. The Singh brothers are contesting that.
Sun Pharmaceutical Industries Ltd purchased Ranbaxy from Daiichi in a $3.2 billion acquisition it completed in 2015.
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