Ex-Ranbaxy promoters fined Rs 2,500 crore

Tribune News Service

New Delhi, May 5

The erstwhile promoters of Ranbaxy Laboratories, Malvinder and Shivinder Singh, have been asked by an arbitration tribunal in Singapore to pay damages of Rs 2,562.78 crore to Daiichi for concealing and misrepresenting information during their stake sale to the Japanese firm.

The Singh brothers, who own Fortis Healthcare, had sold their entire stake of about 35 per cent in Ranbaxy for $2.4 billion in 2008 to Daiichi Sankyo, which was one of the biggest-ever transactions in India Inc at that time.

However, in 2013, the Japanese pharmaceutical major filed an arbitration case in Singapore, accusing the Singh brothers of concealing and misrepresenting facts after Ranbaxy had to pay $500 million to the US Department of Justice as settlement for misrepresenting facts.

After buying out the erstwhile promoters, Daiichi spent around Rs 22,000 crore to gain a majority stake in Ranbaxy. Later, the Japanese firm exited Ranbaxy following a $4.2 billion merger deal between Sun Pharma and Ranbaxy. In a statement, the sellers of shares of erstwhile Ranbaxy Laboratories, which includes RHC Holding and Oscar Investments as a party, said the arbitration tribunal has issued an award.

The arbitration tribunal has issued an award by a majority of 2:1 in favour of the claimant for damages of an amount of Rs 2,562.78 crore, RHC Holding Pvt Ltd said in a statement.

RHC Holding Pvt Ltd is among the sellers of shares of erstwhile Ranbaxy Laboratories along with Oscar Investments, which have been named as respondents in the arbitration suit by the claimant, Daiichi Sankyo.

The statement said the law governing the dispute was Indian Law by a majority of 2:1 in favour of the claimant (with Justice AM Ahmadi, former Chief Justice of India, giving a dissenting opinion dismissing all claims of the claimant) for damages of an amount of Rs 2562.78 crore.

The statement said the damages include “quantified interest, costs and expenses of the arbitration till the date of award and interest on above until date of payment, against all respondents jointly and severally”.