Daiichi penalty: HC refuses to secure Singh brothers' assets

Directs compliance with previous undertaking by Ranbaxy promoters that Rs3,562-cr penalty is secured

The Delhi High Court on Tuesday asked Malvinder Singh and Shivinder Singh, former promoters of Ranbaxy Laboratories, to abide by their previous undertaking and ensure the penalty that the Singapore Tribunal had awarded in favour of Daiichi remained secured, pending the ongoing proceedings before the court.

This followed a submission by the Singh brothers to the court that capital infusion was necessary to run the multi-million dollar company. In August last year, the company had got shareholders’ consent enabling it to raise the requisite funds to run operations in the backdrop of a Rs 2,562-crore penalty that the Singapore arbitral tribunal had awarded in favour of Daiichi Sankyo. 

In its latest attempt to secure assets of the Singh brothers, Daiichi’s lawyer senior advocates Arvind Nigam and C A Sundaram, mentioned in court that Fortis and Religare Finvest were already in talks to sell stake. 

However, the counsel for the Singh brothers said the assets were still secure in relation to the arbitral award, as per last undertaking made before the court. 

The counsel for the Singh brothers reiterated that their commitment before court stood strong, and that the company (RHC Holdings) was merely trying to infuse capital into the entity for operational requirements. 

Daiichi has alleged the concealment and misrepresentation of critical information regarding US Food and Drug Administration and Department of Justice proceedings against Ranbaxy, which cost the former $500 million in settlement fees in 2013, after their acquisition of Ranbaxy Laboratories. 

On May 24, Daiichi had sought an interim order from the Delhi High Court to secure assets of the Singh brothers, expressing concerns over possible alienation or disposal of assets, which could frustrate the enforcement of the Singapore award. 

The court had on that occasion refused to grant Daiichi a relief following assurances made by former Ranbaxy promoters that they would keep the sum ready in order to pay arbitral determination (totalling Rs 3,562 crore with interest), subject to final determination in court. 

The Singh brothers are majority shareholders in RHC Holdings, a company that controls Fortis Healthcare and Religare.

The Delhi High Court will hear the matter next on January 23.