Malvinder Singh Ordered by Delhi High Court to Deposit 3.5 Million Singapore Dollars

Malvinder Singh Ordered by Delhi High Court to Deposit 3.5 Million Singapore Dollars

On Wednesday, the Delhi High Court Justice Rajiv Shakdher, said Malvinder Singh disobeyed court orders after it was revealed that he sold his stake in Singapore-listed Religare Health Trust for around 3.5 million Singaporean dollars (Rs 18.22 crore) as the court had restricted Singh, his family and other respondents from dealing with assets disclosed in an ongoing case by Daiichi Sankyo to enforce a Rs 3,500 crore arbitration award against him and his brother, Shivinder Singh on February 19.

On 31st January, the Delhi High Court had upheld an international arbitral award of Rs 3,500 crore passed in favour of Japanese pharmaceutical major Daiichi Sankyo, which has alleged that the former promoters of India’s Ranbaxy Laboratories Ltd awarded by a Singapore tribunal, which had passed the award in favour of Daiichi holding that the former Ranbaxy promoters and brothers, Malvinder Singh and Shivinder Singh, had concealed information that the company was facing probe by the US Food and Drug Administration and the Department of Justice, while selling its shares in Ranbaxy to Daiichi for Rs 9,576.1 crore in 2008. Appealing against the award in India as well as in Singapore's Court of Appeal, the Singh brothers had argued the award money was not enforceable under the laws of India.

The high court was approached by Daiichi in 2016 to seek the enforcement of a April 2016 Rs 2,562 crore Singapore arbitral award, along with an additional claim of lawyers’ fees and interest incurred in connection with the proceedings. Singh brothers’ counsel had argued the award granted consequential damages which were beyond the jurisdiction of the arbitral tribunal and the award cannot be enforced under the provision of the Arbitration Act. They had also raised the aspects of violation of fundamental public policy of India and time barred under the limitation act. They had alleged that Daiichi was fully aware of all facts and still chose to retain the Ranbaxy shares, instead of terminating the agreement and returning them.

So far, no decision has been taken on Daiichi's pleas to block a proposed sale of Fortis to Malaysian healthcare group IHH, which was approved by shareholders last month and Daiichi’s application on this matter is to be heard next on November 1. During the hearing, the Court was told by Malvinder Singh's lawyer that former Fortis and Ranbaxy promoter had sold 45 lakh units held in RHT towards payment of an EMI of a property he purchased in Singapore. While Daiichi’s lawyer alleged that Singh was in contempt of court for this action, the Court directed Daiichi to file a separate application to that effect.

The bench observed that there has been a “disobedience” of the court’s order to maintain status quo of assets disclosed in Daiichi’s case and directed Singh to deposit this money with the court within four weeks. The Court also directed that Rs 9 crore from the court-appointed chartered accountant’s sale of shares held by the Singhs, their families and companies controlled by them in listed firms be released towards part payment of Daiichi's award against the brothers. However, the plea of several private banks, including Yes Bank and Axis Bank, to whom Singhs owned money, that some amount be released to them also since the Debt Recovery Tribunal (DRT) had passed the attachment order in their favour was turned down by the Court.

The court posted the matter for further hearing on October 11. Further, on Wednesday, Shivinder further moved the NCLT to remove Malvinder from the board of RHC Holding and also asked to reconstitute the board of the company and also requested before the tribunal to allow him or his authorised representatives to inspect the statutory records of RHC Holding and taking copies thereof. Shivinder also additionally requested NCLT to “direct Malvinder and Godhwani to restitute the undue gains made by themselves which lead to losses being suffered by the petitioners and RHC Holding”. The petition is listed for hearing  before the principal Bench of the NCLT on Thursday.

On Tuesday, Shivinder Singh had also filed a case at the National Company Law Tribunal against Malvinder Singh and Sunil Godhwani, former chairman and managing director of Religare, “for oppression and mismanagement of RHC Holding, Religare and Fortis.”

Daiichi Sankyo
Debt Recovery Tribunal (DRT)
Delhi High Court
National Company Law Tribunal (NCLT)
Ranbaxy Laboratories Ltd.

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