Daiichi Sankyo Case: Supreme Court reserves order on contempt case against Singh brothers

The Supreme Court on Thursday reserved its verdict on a petition moved by Daiichi Sankyo alleging that former Fortis promoters Malvinder and Shivinder Singh were in contempt of orders to maintain the status of unpledged shares in the hospital group in 2017. The court had last week warned the brothers that they could be sent to jail if it was found that they had disobeyed its orders. The court has so far not allowed Malaysian healthcare group IHH Healthcare to follow through with an open offer to pick up 26% stake in Fortis Healthcare. IHH last year acquired 31.1% stake in the hospital group as part of an acquisition, but the apex court in December 2018 stalled it from picking up the additional 26% by ordering that status quo with regard to the sale be maintained. Fortis has told the court that it has nothing to do with the ongoing dispute between Daiichi and the hospital chain’s former promoters, and that the Singhs do not have controlling stake in it. The hospital group’s lawyer Thursday argued its shareholders were “entitled” to the open offer, which was approved by the Securities and Exchange Board of India, according to lawyers present during the proceedings. Daiichi is enforcing a Rs3,5000000000 arbitration award that it won against the brothers after it alleged they concealed information regarding wrongdoing at Ranbaxy when selling the firm to the Japanese drug maker in 2008. In 2017, the apex court had ordered the brothers to maintain the status of their unpledged shares in Fortis, which was to be considered towards paying Daiichi’s award. However, Daiichi in December 2018 filed a contempt petition against the brothers, alleging that companies controlled by them as well as Indiabulls Housing violated these orders. The brothers have refuted these allegations, said lawyers. Last month, the Supreme Court had asked the brothers to come up with a plan for how they were going to secure Daiichi’s arbitration award.