Daiichi Sankyo case: SC holds former Ranbaxy promoters Malvinder, Shivinder Singh guilty of contempt of court

New Delhi: The Supreme Court Friday 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 earlier 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.

Supreme Court holds Singh Brothers, Fortis Healthcare guilty of contempt of court. Singh Brothers can purge contempt by deposit of Rs 1,175 cr each pic.twitter.com/BFuCHx2AW6

— CNBC-TV18 (@CNBCTV18Live) November 15, 2019

A bench comprising Chief Justice Ranjan Gogoi and Justice Deepak Gupta 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 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, it moved the Singapore arbitration tribunal alleging that the Singh brothers had concealed information about their company facing 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 $500 million penalty to resolve potential, civil and criminal liability. The company had 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 high court had on 31 January, 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 had 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 16 February last year, the Supreme Court had dismissed the Singh brothers’ appeal against the high court verdict upholding the international arbitral award, saying it was not inclined to interfere with it. The top court had on 14 March asked them to submit a concrete plan for paying Rs 3,500 crore to Daiichi Sankyo as directed by the Singapore tribunal.