Supreme Court refuses permission to Singh brothers to sell Fortis shares Aug 31, 2017 17:34 IST
The Supreme Court on Thursday refused to give the Singh brothers (Malvinder and Shivinder, the original promoters of Ranbaxy and Fortis) permission to sell Fortis shares. It also refused permission to banks with whom the Singhs have pledged Fortis shares to do the same.
Shares of Fortis were down 6.6% at 12.30pm, reacting to the court’s order.
On 11 August, the court had asked companies controlled by the Singhs to not sell shares in Fortis. The Singhs subsequently approached the apex court on 23 August asking for permission to sell shares in Fortis already pledged with the banks.
In Thursday’s order, the Supreme Court restrained the Singhs from disposing off any of their assets (both encumbered and unencumbered) till the final disposal of the case on 31 October. Encumbered assets are those pledged or offered as collateral to a lender.
The court’s 11 August order was in response to a plea by Daiichi Sankyo Ltd. That plea followed a 21 June order by the Delhi high court that cleared the way for the Singhs to potentially sell a stake in Fortis Healthcare Ltd, on the condition that the disclosed value of their unencumbered assets remained unaffected.
Daiichi bought Ranbaxy Laboratories from the Singhs in 2008 for $4.6 billion. In 2014, it sold Ranbaxy to Sun Pharmaceuticals for $3.2 billion. By then it had already launched arbitration proceedings against the Singhs in Singapore, alleging that they withheld information on Ranbaxy (and its problems with the US Food and Drug Administration) at the time of the deal.
In 2016, the Singapore arbitration court ordered the Singhs to pay up Rs2,562 crore in damages to Daiichi. The total value of their dues after interest addition and legal fees came to Rs3,500 crore.
Since then, Daiichi and the Singhs have been locked in litigation over the enforcement of the Singapore court’s award.
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