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A bench of the Supreme Court on Wednesday asked the Andhra Pradesh High Court to decide on a suit against the merger of Sun Pharmaceutical Industries and Ranbaxy Laboratories in two days. The apex court will consider the appeals of the two companies next Tuesday.
The vacation bench of judges B S Chauhan and A K Sikri said it would be appropriate for the high court to hear the case and decide on it before the apex court considered the matter.
The vacation bench of the high court had ordered a temporary stay against the merger, after which the companies had moved the vacation bench of the Supreme Court, challenging the former’s order. According to the petition moved by Sun, the high court order was hurting its 139,546 and Ranbaxy’s 182,721 shareholders.
A M Singhvi, counsel for Sun Pharma, said the high court order was “lacking in jurisdiction as both companies are outside that state.”
He added the investors who had moved the high court, alleging insider trading in Ranbaxy’s stock by a Sun subsidiary before the merger was announced, had abused the process of law and indulged in “forum shopping” as suits had been also filed in the high courts of Gujarat and Punjab & Haryana. One of these petitioners held only 350 shares of the total 40 million. The $4-billion merger, thus, could not be held up by an interim order, the Singhvi said.
A few shareholders, led by T Shiva Kumar, have alleged that before the announcement of merger, there was transaction in Ranbaxy’s stock tripled in three sessions and Silver Street Developers, one of the buyers, was owned by two subsidiaries of Sun.
Daiichi Sankyo, from which Sun is buying Ranbaxy, also has appealed to the Supreme Court against the high court stay on the merger.
