SC awards six months jail term to former promoters of Fortis Healthcare, Health News, ET HealthWorld

SC awards six months jail term to former promoters of Fortis Healthcare

New Delhi, The Supreme Court on Thursday awarded six months jail term to former promoters of Fortis Healthcare Ltd, Malvinder Singh, and Shivinder Singh, in a case related to the sale of shares of Fortis to Malaysia-based IHH Healthcare.

A bench headed by Chief Justice Uday Umesh Lalit and Justices Indira Banerjee and KM Joseph also awarded six months jail term to the former promoters of Fortis Healthcare who were earlier held guilty of contempt.

The top court also ordered a forensic audit of the share sale in Fortis Healthcare Ltd.

“Everything goes back to the executing court”, the CJI said, while pronouncing the order.

The judgement is yet to be uploaded on the apex court website.

The former promoters of Fortis Healthcare Ltd were facing the court battle after a Japanese firm, Daiichi Sankyo, had challenged the Fortis-IHH share deal to recover the Rs 3,600 crore arbitration award that it had won before a Singapore tribunal against the Singh brothers.

The IHH-Fortis deal is stuck due to the legal fight between Daiichi and the former promoters of Fortis Healthcare.

In 2018, when some Indian lenders sold the pledged shares of Fortis Healthcare to the Malaysia-based firm, Daiichi went to court alleging that the former promoters of Fortis had assured them that their shares in the Indian hospital chain will cover the arbitral award amount.

Fortis Healthcare, in a statement, said, “We understand that the proceedings before the Hon’ble Supreme Court have concluded with certain directions and the suo-motu contempt has been disposed of. We will go by the directions of the Hon’ble Supreme Court and will be seeking legal advice regarding our future course of action”.

“We remain committed to our core purpose of patient care and will continue to focus on our strategic and operational objectives to further strengthen and expand our healthcare network. We will keep all our stakeholders informed, as required”, it said.

On November 15, 2019, the top court held former Ranbaxy promoters Malvinder and Shivinder Singh guilty of contempt for violating its order that had asked them not to divest their shares in Fortis Healthcare Limited.

The apex court had during the hearing of a contempt plea asked the Singh brothers to give it a plan as to how they would honour the arbitral award of Rs 3,500 crore granted by a Singapore tribunal against them, in favour of Japanese drug manufacturer Daiichi Sankyo.

The top court had held them guilty of contempt of court and said that they had violated its earlier order by which the sale of their controlling stakes in Fortis Group to Malaysian firm IHH Healthcare was put on hold.

The apex court had said it would hear the Singhs on the quantum of sentence later.

The Japanese firm had filed a contempt petition against them alleging that execution of their arbitral award had been in jeopardy as the Singh brothers disposed of their controlling stakes in Fortis Group to the Malaysian firm.

Daiichi had bought Ranbaxy in 2008.

Later, Daiichi moved to the Singapore arbitration tribunal alleging that the Singh brothers had concealed information about their company facing a probe by the US Food and Drug Administration and the Department of Justice while selling its shares.

Daiichi had to enter into a settlement agreement with the US Department of Justice, agreeing to pay a USD 500 million penalties to resolve potential civil and criminal liability.

The company then sold its stake in Ranbaxy to Sun Pharmaceuticals for Rs 22,679 crore in 2015.

A tribunal in Singapore had passed the award in favour of Daiichi.

The Delhi high court had on January 31, 2018, upheld the international arbitral award passed in favour of Daiichi and paved the way for enforcement of the 2016 tribunal award against the brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for Rs 9,576.1 crore.

Sun Pharmaceuticals Ltd later acquired the company from Daiichi.

Daiichi had moved the high court seeking direction to the brothers to take steps towards paying its Rs 3,500 crore arbitration award, including depositing the amount.

It had also urged the court to attach their assets, which may be used to recover the award.

On February 16, 2018, the top court dismissed the Singh brothers’ appeal against the high court verdict upholding the international arbitral award, saying it was not inclined to interfere with it.

It had on March 14, 2019, asked them to submit a concrete plan for paying Rs 3,500 crore to Daiichi Sankyo as directed by the Singapore tribunal. PTI MNL SJK MNL RKS RKS

Source link