New Delhi: After months of simmering discontent, the feud between the Singh brothers of the erstwhile Ranbaxy group spilled out into the open with younger sibling Shivinder filing a case of “oppression" against his brother Malvinder Singh and family friend Sunil Godhwani for systematically undermining the interests of Fortis Healthcare Ltd and related firms.
“I have filed a case against Malvinder and Sunil Godhwani in NCLT the for oppression and mismanagement of RHC Holding, Religare and Fortis," Shivinder said in a three-page document.
“The collective, ongoing, actions of Malvinder and Sunil Godhwani led to a systematic undermining of the interests of the companies and their shareholders... as also the committed and loyal employees of the group...," he added. “I mutely watched the organisation I founded come to a point where it was publicly auctioned; where my family and myself have been stripped of our legacy, our finances and my personal credibility."
Malvinder Singh declined to immediately comment on the development.
Mint on 2 July reported on the serious differences emerging between the Singh brothers, the two former promoters of Fortis Healthcare, with Shivinder distancing himself from the alleged irregularities and decisions taken in the past two years at the hospital chain.
Heirs to a generations-old business house, once worth billions, the Singh brothers have in the last six months seen a dramatic fall in their fortunes with much of their public shareholdings seized by lenders. The irregularities in Fortis is being probed by financial authorities, including the Serious Fraud Investigations Office (SFIO,). The Singh brothers owe $500 million to Daiichi Sankyo over fraud allegations related to the 2008 sale of drugmaker Ranbaxy Laboratories. The role of the two brothers are also being probed as part of the ongoing investigations.
Fortis Healthcare has said it will appoint an external agency to undertake scrutiny of its internal controls and compliances after an investigation found systemic lapses in funds allegedly taken out of it by erstwhile promoters Singh brothers.
Shivinder Singh claimed that he had retired and had left for Radha Soami Satsang Beas, a spiritual organization, in December 2015, leaving Fortis Healthcare in supreme financial health and hence he has no hand in any wrongdoing.
He questioned decisions taken in Religare’s NBFC arm (which was headed by Godhwani); the transaction and subsequent management of the sale of the group’s then flagship—Ranbaxy to Daiichi, which he called “the most damaging arbitration case in the history of India Inc."; the unimaginable losses accumulated in running a private charter airline business (Ligare Aviation).
“All these only go to show that the malaise is systemic," Shivinder Singh said, adding the damage caused was irreparable. “Despite my best efforts, on my return from Beas for the past many months to salvage the situation, the continued systemic missteps resulted in a quicksand which now seems beyond resolution, if I continue to remain silent," he said.
In his release, Shivinder Singh also sought to disassociate himself from his brother claiming that for two decades he and his brother have been synonymous with one another and he has “all along been the publicly supportive younger brother to Malvinder’s chairmanship of the group, who took decisions on behalf of the family".
“While it saddens me immensely and I wish Malvinder well; I can no longer be party to activities in which transparency and ethics are continuously and consistently negated. It has come to a point where this means that I am now disassociating from my brother as a business partner and will be pursuing an independent path going forward," he said in the letter.
“This action was long overdue but got delayed in the fond hope that better sense shall eventually prevail and another ugly chapter of family feud would not be written in our family business’ glorious history."
Singh referred to the legacy that had been created by their father, Parvinder Mohan Singh, who grew the business exponentially to make Ranbaxy India’s foremost pharmaceuticals firm. In the 1980s, the group saw a bitter family tussle and boardroom battle between father (Bhai Mohan Singh) and his son Parvinder Singh who finally wrested control of Ranbaxy.