Daiichi-Ranbaxy row: High Court allows sale of Singh brothers’ firms

The Delhi High Court today allowed the sale of unencumbered shares of the firms of former promoters of India’s Ranbaxy Laboratories Ltd in listed companies to repay the Rs 3,500 crore arbitration award in favour of Japanese pharma major Daiichi Sankyo.

Justice Jayant Nath also directed the debtors to fully cooperate with the chartered accountant (CA), who was appointed a local commissioner in the matter, to sell these shares at the stock exchange.

The court said the proceeds should be deposited with the registrar general of the High Court and listed the matter for further hearing on May 14.

The order came after the CA submitted a report on May 8 giving the list of shares of the Singh brothers — Malvinder and Shivinder, their family members and firms including RHC Holding Pvt Ltd and Oscar Investments Ltd, in listed companies.

“The local commissioner/CA is directed to sell the entire lot of unemcumbered shares of the respondents, other than respondent number 1 (Malvinder Singh) in listed companies,” the high court said.

The counsel for the Singh brothers told the court that the Debt Recovery Tribunal had ordered a stay on the sale of unencumbered assets of Malvinder Singh in a separate case by the Yes Bank. The high court then sent a notice to the Yes Bank seeking its response.

The court also issued notice to Daiichi on a plea by the brothers seeking a stay on the enforcement proceedings, as a Singapore court has reserved its judgment in an appeal by them against Daiichi’s award.

Singh brothers’ advocate said the judgment of the Singapore court was expected in June and the proceedings to enforce the award here should be stayed till then.

The Delhi High Court had earlier ordered the attachment of all unencumbered assets of RHC Holdings Pvt Ltd and Oscar Investments Pvt Ltd.

A Singapore tribunal had in April 2016 passed the award in Daiichi’s favour holding that the brothers had concealed information that their company was facing probe by the US Food and Drug Administration and the Department of Justice, while selling its shares.

The high court on January 31 had upheld the international arbitral award passed in the 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.

It had however said that the award was not enforceable against five minors, who were also shareholders in Ranbaxy, saying they cannot be held guilty of having perpetuated a fraud either themselves or through any agent.

Daiichi had moved the high court here 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 February 16, the Supreme Court had dismissed Singh brothers’ appeal against the high court verdict upholding the international arbitral award.

Singhs’ counsel had argued that the award granted consequential damages which were beyond the jurisdiction of the arbitral tribunal and the award cannot be enforced under the provision of the Arbitration Act.

They had claimed that Daiichi was fully aware of all facts and still chose to retain the Ranbaxy shares, instead of terminating the agreement and returning them.

Andhra HC lifts stay on Ranbaxy, Sun Pharma merger

sun pharmaShares of Sun Pharmaceutical Industries and Ranbaxy Laboratories are trading higher by up to 3% in early morning deals after the Andhra Pradesh High Court cleared the decks for the $4-billion deal to go through by lifting the stay.

The Andhra Pradesh High Court on Saturday vacated a status quo order it had issued earlier on Sun Pharma-Ranbaxy merger process, paving the way for the pharma giants becoming a single entity, the PTI report suggests.

In order, vacation judge G Chandraiah said there was no need for the status quo, as Sebi was already inquiring into the insider-trading allegations and the process of merger was outside the purview of this probe, added report.

Ranbaxy Laboratories has surged 5% to Rs 460, while Sun Pharma gained nearly 4% to Rs 607 on the Bombay Stock Exchange.

(Source: PTI)

SC dismisses PIL seeking curbs on sale of Ranbaxy drugs

The Supreme Court Tuesday dismissed a petition for prohibiting Ranbaxy from producing and marketing its alleged “adulterated” medicines in the Indian market in the wake of reports of the pharma major having sold misbranded drugs in the US.

A bench of Justice A.K.Patnaik and Justice Ranjan Gogoi dismissed the Public Interest Litigation (PIL) by advocate M.L. Sharma, asking him to produce the material to show that drugs being marketed by the pharma major were substandard.

Holding that the courts could not be used for publicity, the court said: “You can’t rely on newspaper reports. What is a relevant material in USA can’t be relied upon in India.”

“You show us some material to show that the drugs produced by Ranbaxy are misbranded, spurious or adulterated and they are harmful to people in India,” the court said.

Justice Patnaik said: “Unless you show these materials, we can’t interfere on PIL based on newspaper reports for the sake of publicity.”

Dismissing the PIL, the court, however, granted liberty to Sharma to move a fresh petition if he gets new material to support his contention.

When the court took up the matter for hearing June 10, it had sought proof that the alleged adulterated drugs that were sold in US were being marketed in India too and were part of same consignment.

In the wake of Ranbaxy’s $555 million out-of-court settlement with the US Food and Drug Administration (FDA) for falsifying data and selling substandard drugs, Sharma moved the apex court seeking direction to the central government to prohibit the production and marketing of substandard drugs by Ranbaxy in India.

(Source: IANS)