Malvinder and Shivinder Mohan Singh, the former Ranbaxy promoters, will challenge a Singapore court's recent order, which has imposed a fine of $400 million (over Rs 2,500 crore), for allegedly concealing and misrepresenting facts from Japanese pharma firm Daiichi Sankyo, when they had sold the promoter's stake to it for $2.4 billion in 2008.
3 years ago, a Japanese company slapped a case against Singh brothers, saying that, they hid information regarding Ranbaxy's FDA troubles, a three-member bench of the Singapore Court of Arbitration recently issued an award by 2:1 in favor of Daiichi.
Filing a legal suit, the Japanese company had accused the brothers of concealing and misrepresenting facts, at the time of its $2.4 billion purchase of a controlling stake (34.8%) in the company in 2008.
Close sources to the Singh family said, “It is going to be a longdrawn legal dispute, and will be challenged. The Singh family is exploring further legal options to challenge court verdict. A statement said in an arbitration dispute between Daiichi Sankyo and the sellers of shares of erstwhile Ranbaxy Laboratories, which includes RHC Holding and Oscar Investments as a party , the Arbitration Tribunal has issued an award, where the law governing dispute was Indian law by a majority of 2:1 in favour of the claimant (Daiichi).”
The source further adds that, the former Chief justice of India, A M Ahmadi, gave a dissenting opinion, dismissing all Daiichi claims, for damages of Rs 2,562 crore, quantified interest, costs and expenses of the arbitration. While Singh family promoted- Oscar investments, lost 4% on BSE to close at Rs 222, group company Fortis Healthcare lost nearly 2% to close at Rs 170.
BSE has already sought the clarification from the Oscar investments, but it is not yet known whether SEBI will investigate the case.
The Japanese company, in 2013, had sought compensation for losses it faced, after paying to the US Department of Justice. Soon after Daiichi acquired it, Ranbaxy's troubles started, when the US drug regulator sent warning letters on its key manufacturing facilities at Paonta Sahib (Himachal Pradesh) and Dewas (Madhya Pradesh) Adding to it, even importing of medicines was banned, due to the manufacturing lapses.
In May 2013, Ranbaxy under the management control of Daiichi was forced to reach a $500-million settlement with the US Department of Justice that the company manipulated test results to get the USFDA approval for its medicines.
Distressed with the several US court cases, regulatory woes and losses, Daiichi, which acquired 60% in Ranbaxy spendinv over $4 billion, has now decided to exit from the company.Sun Pharma agreed to buy the company in 2014 from Daiichi in a deal valued at $4 billion, including debt.
By Phani Ch
