News By/Courtesy: Pushpit Singh | 18 Nov 2019 6:20am IST

HIGHLIGHTS

  • Singh brothers asked to pay Rs. 1,170.95 crores each
  • Various directors of Indiabulls Housing Finance Limited and Indiabulls Ventures Limited were also found to be guilty of contempt
  • The Court has further initiated suo motu contempt proceedings against Fortis Healthcare and has refused to lift the stay on the IHH Healthcare's open offer for Fortis

The Supreme Court, on November 15, 2019 found former Ranbaxy promoters Malvinder and Shivinder Singh (Singh brothers) guilty of contempt of court.

The Bench of Chief Justice of India Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna also held that the contempt can be purged by the Singh brothers upon payment of Rs 1,170.95 crores each. The order passed states,

"... (the Singh brothers) have knowingly and wilfully violated the orders of this Court dated 11.08.2017, 31.08.2017 and 15.02.2018 as continued on 23.02.2018. Therefore, we hold both of them guilty of committing Contempt of this Court. We give one chance to them to purge themselves of the contempt. We, direct that in case each of the contemnors deposits a sum of Rs.1170.95 crores in this Court within eight weeks from today then we may consider dealing with them in a lenient manner, while imposing sentence".

Various directors of Indiabulls Housing Finance Limited and Indiabulls Ventures Limited were also found to be guilty of contempt. These directors have been given an opportunity to purge themselves of contempt by depositing the value of 12,25,000 shares as on August 31, 2017 in the Bombay Stock Exchange within eight weeks.

The Court has further initiated suo motu contempt proceedings against Fortis Healthcare and has refused to lift the stay on the IHH Healthcare's open offer for Fortis. The Court will hear the question of this open offer when it takes up the matter next February 3, next year.

The Bench had reserved orders in the plea on April 11 this year.

Japanese company Daiichi had alleged that the Singh brothers had acted against the Supreme Court's order which had mandated the maintenance of status quo on the sale of Fortis Healthcare. The Supreme Court had sought the personal presence of the Singh brothers to interact with them on this issue.

On interacting with the brothers, the Court had first asked them to come up with a resolution plan and later, on being dissatisfied their replies on the same, warned them of being jailed for contempt if they continued to violate the Court's orders. In March, the Court sought a concrete plan to resolve the issue of payment of over Rs 4000 crore by the Singh brothers to Daiichi to honour the arbitral award.

Daiichi had told the Supreme Court that the brothers had diverted funds despite the Court ordering them to maintain their stake in Fortis Healthcare. In this light, a suggestion was made to sell off the property of the contemnors under the instructions of the Court.

The matter reached the Supreme Court when Daiichi filed a contempt plea against the former promoters of Ranbaxy on the grounds that the payment of over Rs 3500 as per the arbitral award by a Singapore-based Arbitration tribunal was not honoured. The Delhi High Court had upheld the enforceability of this award.

In December 2018, the Supreme Court had stayed the sale of Fortis Healthcare to Malaysia’s IHH Healthcare and had directed the parent company of Fortis Healthcare, RHC Holding and Oscar Investment - owned by the Singh brothers - to maintain status quo with respect to the deal. Consequently, IHH Healthcare's acquisition of stake in Fortis was stayed.

It is Daiichi Sankyo's case, however, that the Singh brothers have created fresh encumbrances on  1.2 million shares of Fortis, which is in violation of the Court's order. Daiichi has also alleged that the two brothers have not honoured their “numerous assurances that there will be no fait accompli and their assets will always be available” towards the satisfaction of Daiichi’s Rs 3,500 crore claim.

Section Editor: Prithvijit Mukherjee | 18 Nov 2019 16:48pm IST


Tags : #Supreme Court of India ; #SinghBrothers

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