New Delhi: The Delhi high court on Thursday directed Fortis Healthcare Ltd to file its reply and affidavit in an application moved by Japanese drugmaker Daiichi Sankyo seeking to prevent the sale of Fortis Healthcare to Manipal Health Enterprises.
The application was moved by Daiichi in the light of its ongoing execution proceedings against former Fortis promoters Malvinder and Shivinder Singh for recovery of a Rs3,500 crore arbitral award.
Fortis Healthcare, which was never a party to the Daiichi-Singh brothers arbitration case, was made a party to the present application by the court.
Justice Jayant Nath also directed Oscar Investments Ltd and RHC Holding Pvt. Ltd, companies owned by the Singh brothers, to submit an affidavit disclosing the unencumbered shares held by them in Fortis Healthcare through another company called Fortis Healthcare Holding, as of 14 March 2017 and 5 April 2018.
They were also asked to explain how the “realizable value" of the assets of Fortis Healthcare Holding was arrived at in a 14 March 2017 affidavit submitted to the court.
Arvind Nigam, appearing for Daiichi, argued that no transaction that would “hamper or diminish" the value of Fortis Healthcare Holding, and therefore adversely affect the valuation of Oscar Investments and RHC Holding, should be permitted.
P. Chidambaram appearing for Fortis Healthcare said that the sale was still at the stage of “talks" and the process would take some time. Fortis Healthcare was undergoing restructuring and no sale would be possible without approval from the shareholders, Securities and Exchange Board of India (Sebi) and NCLT, he said.
“Fortis Healthcare has several shareholders and Fortis Healthcare Holding is one of them. The holding company at one point of time held 52% shares which has now come down to 0.67% as bulk of it was encumbered," Chidambaram said.
The board of Fortis Healthcare had announced the sale of its hospital assets to Manipal Health Enterprises Pvt. Ltd and buyout firm TPG Capital on 27 March.
On 31 January, the court had upheld the enforceability of an award passed by a Singapore tribunal, which found the Singh brothers and others guilty of making false claims in a self-assessment report and of fraudulently misrepresenting and concealing the “genesis, nature and severity of the US regulatory investigations" of Ranbaxy when Daiichi Sankyo bought their 34.82% stake for $2.4 billion in 2008. The total deal value was $4.6 billion.
Pursuant to Daiichi ‘s plea seeking execution of the court’s order, all unencumbered assets disclosed by the Singh brothers and others—including Oscar Investments and RHC Holdings—in affidavits submitted to court have been attached by the court.
The matter will be heard next on 25 April.