Daiichi Sankyo case: Singh brothers may move Supreme Court of Singapore

Family members working overtime to settle tiff between the two out of court

Shivinder and Malvinder
Shivinder and Malvinder
Aashish AryanSohini Das New Delhi/Mumbai
Last Updated : Dec 23 2018 | 11:58 PM IST
On August 1, 1952, Bhai Mohan Singh, who moved to India during the Partition, bought a small pharmaceutical company for Rs 250,000. The risk of putting such a big amount at the time into Ranbaxy paid off soon. By 1970s, Ranbaxy was a household name. 

Ironically, 66 years later (on August 1), Bhai Mohan Singh’s grandsons Malvinder and Shivinder, the erstwhile promoters of Ranbaxy Laboratories, faced the prospect of going to jail for the first time. During a Delhi High Court hearing on that day, a single-judge Bench observed that if the brothers were unable to pay the enforcement amount they owed Daiichi Sankyo, they should declare themselves insolvent or go behind bars. 

“If they do not have the money, why don’t they declare themselves insolvent? Either they have the money or they don’t,” the judge told the brothers’ lawyers. It was also the first time they had been summoned by the court to appear in person. 

According to sources, things have now come to such a pass that Shivinder is considering going to the market for earning money again to pay creditors back. “Just that Shivinder now wants to disassociate legally from his elder brother, as he feels Malvinder’s reputation would ruin his prospects (be it securing bank loans or an investor for his business),” a person, who is close to the brothers, said. 

The sense of urgency stems from the fact that on Friday (December 21), a Singapore HC rejected the brothers’ plea challenging a Singapore tribunal ruling that asked them to pay Rs 35 billion to Japanese drugmaker Daiichi. 

The brothers are said to be considering legal recourse against the ruling and are likely to move the Supreme Court of Singapore against the judgment soon, sources close to them revealed. 


“Many lawyers in Singapore are on leave. (The brothers) have the option of moving a higher court there against the high court order,” another source said, adding that it would be done within a month. 

Meanwhile, the Singh family is working overtime to convince the siblings to make peace. Since Shivinder withdrew the case against Malvinder from the National Company Law Tribunal (NCLT) a couple of months back, the two have met several times. But all these meetings have resulted in stalemate. 

“Key family members (including maternal uncles) have decided to play peacemaker to save them from facing punitive action at a court of law. The brothers would not come in the same forum, but family members would play mediator,” someone, who is close to both, said. 

In a last ditch effort to disassociate with his brother, Shivinder is learnt to have offered money to settle things. Sources said Malvinder has sought nearly Rs 10 billion to disassociate himself with Shivinder and the Fortis brand. 

Shivinder, however, has questioned as to how someone, who “is leaving behind liabilities of thousands of crores also want a parting gift”, sources said. 

Daiichi and other creditors believe only fear of jail will make them pay up. In the ongoing proceedings in the Delhi HC, Daiichi has repeatedly alleged that the brothers have created a shell of companies to avoid paying up. In one such plea, Daiichi alleged that the two created a shell of as many as 28 real estate companies, who were given fraudulent loans by RHC Holding. The HC has barred most of these firms from creating any third-party rights over the properties they own. 

It is due to these properties, too, that the brothers do not want to drag each other to the court and settle their fight by way of mediation, the sources said. 

“Once they go to court, they will have to detail all assets, including the ones they live right now. That could be trouble for them,” the sources said, adding that it was Malvinder who insisted the most on not parting away with these properties. Daiichi has claimed that Malvinder resides at Maulsari Avenue of Westend Greens in Rajokri area of New Delhi and that Shivinder also lives in the same area, in a different house. 

Their fates got entangled with Daiichi when they sold 33.5 per cent of Ranbaxy Laboratories’ stake to the latter for $2.4 billion in 2009. The deal, then touted as the biggest, ran into trouble soon. 

In 2012, Daiichi initiated arbitration against the brothers, accusing them of concealing and misrepresenting facts related to US Food and Drug Administration proceedings against Ranbaxy Laboratories. In its pleadings before the Singapore tribunal, Daiichi said they lied to “induce the buyer to buy the shares at a price that did not reflect their true value”. 

The Singapore tribunal held the brothers guilty and asked them to pay Rs 35 billion to Daiichi. The tribunal award, which was challenged by the brothers in the High Court of Singapore, was rejected on December 21. 

Daiichi had, in May 2016, also approached the Delhi HC for the enforcement of the Rs 35-billion award. After two years of litigation, the Delhi High court, too, in January this year upheld the Singapore tribunal award. 
The brothers also face litigation from another firm founded by them — Religare Enterprises. Religare Finvest, an arm of Religare Enterprises, had on December 19 filed complaints with the Economic Offences Wing of the Delhi Police accusing the duo of cheating, fraud and misappropriation of Rs 7.40 billion. This has the brothers really worried, sources said, adding that they were not as worried about the Daiichi proceedings. 

The orders of courts in Singapore notwithstanding, the avenues for the brothers seem to be closing down fast. 

This is not the first time Shivinder has gone against his brother, legally or otherwise. In a strongly worded letter, written in September, Shivinder had blamed Malvinder for the financial troubles of the Fortis group. 

Shivinder wrote that it was Malvinder’s actions that led to the Daiichi arbitration, which was, according to him “one of the most damaging arbitration cases in the history of India Inc”. 

Shivinder also moved the NCLT, asking it to remove Malvinder and other senior executives from the management of RHC Holding, Religare Enterprises, and Fortis Healthcare, citing oppression and mismanagement. The case was, however, withdrawn a week later on the insistence of their ailing mother. 

Malvinder had maintained radio silence until exactly two months later when the news of the brothers coming to blows during a meeting came out. In a widely circulated video on December 7, Malvinder was seen showing his injuries on the elbow that he said happened when Shivinder tried to force his way into the meeting of Prius Real Estate and threaten board members. While Shivinder denied the allegations, tempers cooled off only after the family intervened. 

The same family members are trying to work out an agreement between the two again. But sources said the latest attempt to end the dispute came to nothing.

Next Story