6 months jail to Singh brothers In Daiichi-Fortis Case, SC refuses to lift stay on Fortis-IHH open offer
New Delhi: The former promoters of Fortis Healthcare, Malvinder Singh and Shivinder Singh (Singh brothers) will now have to serve a jail term of 6 months as pronounced by the Supreme Court on Thursday in the Daiichi-Fortis case. The top court further denied to lift the stay on IHH's open offer and remanded the issue of the Fortis-IHH deal to Delhi High Court, while directing it to consider a forensic auditor appointment for the deal.
IHH Healthcare acquired a 31 percent controlling stake in Fortis in August 2018 for USD 1.1 billion, triggering a mandatory open offer to acquire another 26 percent. The bidding process was overseen by an independent board.
The Securities and Exchange Board of India (SEBI) had approved IHH Healthcare to launch an open offer worth Rs 3,350 crore for shareholders of Fortis in December 2018.
The Malaysian healthcare group IHH Healthcare had finally won the bid for Fortis in a long-fought battle. However, the open offer was blocked by Japanese drug maker Daiichi Sankyo.
Daiichi challenged IHH's proposed acquisition of Fortis in an effort to hold the Fortis founders accountable for an arbitration award of Rs 3,600 crore (USD 500 million) resulting from a fraud claim.
The erstwhile Ranbaxy promoters Malvinder Singh and Shivinder Singh were accused of concealing information regarding wrongdoing at Ranbaxy when they sold a majority stake in the company to the Japanese firm Daiichi Sankyo in 2008. The Singapore tribunal had in 2016 awarded Daiichi Rs 3,600 crore in damages.
Daiichi had filed a petition against the Singh brothers and Indiabulls, alleging that both parties had pledged 1.7 million shares of Fortis Healthcare, which was held by Fortis Healthcare Holding, despite the apex court forbidding it. The deal between Fortis and IHH was signed in August 2018. In December 2018, the SC had stayed the IIH open offer.
Also Read: Held Guilty Of Contempt In Stake Sale To IHH, Fortis Healthcare Exploring Legal Options
Meanwhile, Fortis 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-off. 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 added.
