Fortis Healthcare promoters Malvinder, Shivinder Singh resign from board
Malvinder and Shivinder Singh resign as directors from Fortis Healthcare’s board following the Delhi HC order upholding the Rs3,500 crore arbitral award in favour of Daiichi Sankyo
New Delhi: Malvinder Mohan Singh, executive chairman and Shivinder Mohan Singh, non-executive vice-chairman of Fortis healthcare resigned from their posts on Thursday.
Both tendered their resignation from the directorships of the company. “The resignation was circulated to the board and the board has decided to discuss the matter in detail at the meeting schedule on February 13,”Fortis informed the BSE.
Embroiled in an international legal battle over alleged fraud, pressure mounted on billionaire brothers after the Delhi high court on January 31 allowed Daiichi Sankyo Co. Ltd to enforce a foreign arbitral award ordering former Ranbaxy Laboratories Ltd owners Malvinder and Shivinder Singh and 13 others to pay about Rs3,500 crore to the Japanese drugmaker.
According to people aware of matter, the Singh brothers could have found a buyer for Fortis healthcare which would infuse money so that they could pay off the lenders.
“The tipping point came when the high court ordered them to pay off Rs3,500 crore. There is a possibility that they have found a buyer,” said a person in know how of things.
In a 115-page verdict, justice Jayant Nath upheld the April 2016 award by an arbitration tribunal in Singapore which had ruled in favour of Daiichi. The tribunal had directed the Singh brothers to pay about Rs2,563 crore in damages, plus interest of 4.44% per year from 7 November 2008 to the date of the award.
The tribunal had directed the Singh brothers to pay about Rs2,563 crore in damages, plus interest of 4.44% per year from 7 November 2008 to the date of the award. The tribunal found the brothers 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 bought their 34.82% stake for $2.4 billion in 2008. The total deal value was $4.6 billion.
Sun Pharmaceutical Industries Ltd in 2014 agreed to acquire Ranbaxy from Daiichi Sankyo for $3.2 billion in stock, in addition to assuming $800 million of debt.
Significantly, the Singh brothers were also recently accused of “diversion, siphoning and digression of assets” by a New York-based investor in a lawsuit filed in the high court of Delhi, Bloomberg News had reported.
According to the report, the lending arm of Malvinder and Shivinder Singh’s publicly traded financial services firm, Religare Enterprises Ltd, made 21 loans to a number of seemingly independent companies that routed at least $300 million back to privately held Singh firms on the same day, according to a central bank investigation of the company’s fiscal 2016 books filed as part of the 700-page suit in November.
The suit, seen by Bloomberg News, alleged that the Singhs diverted the lender’s funds to aid them with a personal debt load of about $1.6 billion, which is forcing the sale of chunks of their empire that includes Religare and Fortis Healthcare Ltd, India’s second-largest hospital chain. A hearing in the case is scheduled for 20 March.
However, Religare has denied the allegations “The allegations “are completely baseless and we categorically deny them,” Religare said in an email response to Bloomberg.
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