Malvinder, Shivinder Singh to pay Rs 2562 crore to Daiichi Sankyo
An arbitration court in Singapore has ordered Malvinder and Shivinder Mohan Singh, former owners of Ranbaxy Laboratories, to pay damages worth Rs 2,562.78 crore (based on Thursday's exchange rate) to Japan's Daiichi Sankyo . Malvinder Singh, currently chairman of Fortis Healthcare, and his brother Shivinder Singh will have to pay the fine for concealing and misrepresenting facts from the Japanese drug giant when it purchased about 35 per cent stake in Ranbaxy from them in 2008.
The court has ruled that the Singh brothers did not share information with Daiichi on investigations into Ranbaxy by the US Department of Justice and Food and Drug Administration (FDA). The arbitration court gave this judgement last week. It has issued an award by a majority of 2:1 in favour of the claimant. In 2013, Daiichi had filed an arbitration case in Singapore, accusing the Singh brothers of concealment and misrepresentation of facts, after Ranbaxy paid $500 million to the DoJ as settlement for misrepresenting facts. The 2008 agreement between Daiichi Sankyo and the former promoters of Ranbaxy had a provision that any future arbitration related to the deal would be pursued in Singapore, in accordance with commercial arbitration rules.
The arbitration dispute was between Daiichi Sankyo and sellers of shares of erstwhile Ranbaxy Laboratories, which includes RHC Holding and Oscar Investments. Ranbaxy was subsequently purchased by the Dilip Shanghvi-led Sun Pharma, while the Singh brothers control a majority stake in RHC Holding and Oscar Investments.
RHC Holding said in a statement that the former owners were considering challenging the verdict.
In 2008, Daiichi Sankyo had bought the entire 34.82 per cent stake in Ranbaxy from its promoters in a $4.6-billion deal. Five years later, in 2013, Ranbaxy had to pay a fine of $500 million to the US authorities after it pleaded guilty to fraudulent activities and misrepresenting data to seek fast drug approvals.