Fortis Singh brothers get 6-months jail

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BROTHERS: Malvinder Singh and Shivinder Singh – PHOTO/ FORTIS ANNUAL REPORT

By Asia Samachar | India |

One time corporate high flyers Malvinder Singh and Shivinder Singh have been slapped a six-months imprisonment by India’s apex court in a long-drawn proceeding.

India’s Supreme Court yesterday (Sept 23, 2022) announced the sentence on the former Ranbaxy promoters in a case where Japanese drug maker Daiichi Sankyo Co is seeking execution of US$500 million award in Delhi High Court against the Singh brothers, who are already in jail on separate fraud and money laundering charges.

The Supreme Court has also ordered a forensic audit of the share sale in Fortis Healthcare Ltd. in 2018 and refused to allow the open offer from Malaysia’s IHH Healthcare Bhd to proceed, triggering a rout in Fortis’s stock, reports Bloomberg.

A ruling by three judge-panel, headed by Chief Justice U.U. Lalit on Thursday sought a probe into sale of shares in Fortis by lenders and transfer of money to RHT Health Trust on a petition filed by Daiichi. The Japanese drug maker had acquired a pharmaceutical firm in 2008 from Malvinder Singh and Shivinder Singh, who are also ex-owners of Fortis Healthcare.

A lower court can decide on whether the open offer for Fortis can be allowed based on the evidence it gets, the judges said. “Everything goes back to the executing court,” Justice Lalit said.

The verdict further delays the takeover of the embattled Indian hospital chain company by Malaysia’s IHH that has already been pending for over three years. IHH acquired about a third of Fortis in 2018 to became its largest shareholder. The open offer for 26% more shares could have helped IHH fortify position in the company. After the first leg of the deal in August 2018, Fortis has embarked on a revamp with a cost cutting campaign implemented by Chief Executive Officer Ashutosh Raghuvanshi, according to the report.

The report added that IHH-Fortis deal is stuck in the cross fire between Daiichi and Singh brothers who used to own Fortis. Daiichi had in 2016 won an arbitration award worth over $500 million against the Singhs in the dispute around the sale of brothers’ generic drug making firm, Ranbaxy Laboratories Ltd., to Daiichi. In 2018, when Indian lenders sold Singh brothers’ pledged shares in Fortis, the Japanese drug maker objected and said the brothers had on oath assured their stake in Fortis will cover the award amount.

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