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The Delhi High Court has summoned brothers Malvinder and Shivinder Singh to appear before it in the ongoing tussle between them, the Fortis Group and Japanese multinational Daiichi Sankyo Company.
When the legal counsels for the brothers resisted, Justice Rajiv Shakdher commented: “It is clear that the presence of Respondent 1 and 6 (Malvinder and Shivinder Singh) is required in the court. This is getting out of hand. What is the problem in not coming here?”
The matter has been next posted for August 10. “If all the parties do not file a reply, I will proceed ex parte against them,” the judge warned.
Unable to recover ₹2,300 crore from Fortis, Daiichi Sankyo had filed an interlocutory application in the Delhi High Court against the proposed Fortis-IHH deal. Along with interest, the realisable amount, which is over ₹3,500 crore, is also increasing with time.
IHH deal
Under the deal, IHH will infuse up to ₹4,000 crore in the beleaguered Fortis chain.
Justice Shakdher told the Fortis legal counsel: “Someone will have to cough up the money...If it is the individuals (the Singh brothers) they will have to come here. You cannot take the court for a complete ride by not respecting the decree.”
While the Fortis lawyers argued that they have sought to de-promotise the brothers and have moved legal proceedings for the same, Daiichi’s counsel Arvind Nigam informed the court: “With the removal of the brothers as promoters, the umbilical cord is sought to be cut fully between the brothers and the group.”
The brothers will have to appear before the court ahead of the Fortis Healthcare’s EGM on August 13. “If the EGM goes through, shares will be allotted in the Fortis-IHH deal. This is what happens every time. Money slips through. Fortis should deposit the money in the court. Is it not a fraud being played upon the court?” Nigam argued.
“Even as the current board seeks to cut the umbilical cord, the CEO and CFO of the group were in the know of the money that was being made available to their sister concerns.”
Meanwhile, Fortis’ legal counsel said the brothers had served the group a notice under the Insolvency and Bankruptcy Code, but did not elaborate on the rationale of such a notice. “If this deal falls through, we are virtually finished,” he said.
Despite Supreme Court orders dated August 11, 2017 and February 23, 2018, directing status quo regarding the shareholding of Fortis Healthcare Holdings Pvt Ltd (FHHPL) , a holding company owned and controlled by the brothers in Fortis Healthcare Ltd (FHL), shares have been systematically divested from 71.6 per cent to 0.66 per cent as on April 13. Fortis claims these are pledged shares of the investing banks and they have sought to sell them. In their latest reply, Fortis said to the court the shareholding of the banks is 0.41 per cent and, apart from this, the brothers hold 23,000 shares, which is negligible.
“A change in shareholding patterns should not lead to violation of court directives of paying up the decree money. To my detriment, the brothers have negligible shares, underlying asset has been floated away, and I am left in a web of holding companies,” Nigam argued.
Justice Shakdher said FHL is not a judgment debtor; is does not have to pay Daiichi Sankyo in the case. But FHL, the holding companies including FHHPL and the brothers are parts of a single economic entity and hence the brothers are required to make a personal appearance in the court.
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