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Chief Justice of India Ranjan Gogoi has pulled up the former promoters of Fortis Healthcare Ltd, brothers Malvinder and Shivinder Singh and directed them to come up with a plan within two weeks on how they can pay over ₹3,500 crore to Japanese drugmaker Daiichi Sankyo as directed by a Singapore arbitration tribunal. The next date of apex court hearing has been fixed at March 28.
Gogoi had summoned the brothers to the Supreme Court after Daiichi moved the apex court in a bid to make the Singh brothers cough up their due of ₹3,500 crore as directed by the tribunal.
In a hearing that lasted close to 40 minutes, Gogoi told the younger brother Shivinder Singh that his excuse of renouncing the world does not make them immune to paying up.
Shivinder in his reply to the court had stated that after turning 40 he announced his retirement and shifted to a spiritual ashram (Radha Soami Satsang Beas) in September 2015 and was compelled to come out of retirement by late 2017 to save the sinking ship.
The elder brother Malvinder tried to wriggle out of the contentious situation by admitting in his reply to the Supreme Court that he is a “law abiding citizen” and has the highest regard for the judiciary. “If there has been any inadvertent disobedience of any order, I tender an unconditional and unequivocal apology,” he stated.
The brothers had given a ‘verbal assurance,’ on May 25, 2016 that they have enough assets to pay the award, and that there was no reason to believe that in the future their economic position would deteriorate, Malvinder stated further.
Dues from entities
Malvinder said that loans and advances worth ₹6,277.34 crore were due and recoverable from various individuals and entities belonging, controlled, linked to a few major companies and individuals.
These borrowers are — Prius Group (Prius Real Estate Ltd, Prius Commercial Projects Pvt Ltd, Religare Group, Narinder Ghoshal, Gurinder Dhillon aka Babaji, spiritual head of Radha Soami Satsang Beas, his family, Sunil Godhwani and Sanjay Godhwani.
He further said that lenders such as YES Bank, Indiabulls Housing Finance unilaterally created pledges of shares Fortis Healthcare Holdings Private Ltd held in FHL after a loss of sentiment and assumed control of the shares in 2017.
Secured lenders began dumping of shares of Fortis and Religare, leading to depleting value of shares, within a span of a year group holding in Fortis slipped from 34 per cent to 0.60 per cent.
Additional shares were pledged with Credit Suisse Finance, Birla Sunlife, First Gulf Bank, Ambit Finvest and Axis Bank due to fall in stock market price of shares given as security to the banks, including shares of FHL, Malvinder said.
He further stated that loss of sentiment has led to stymied negotiations with lenders to consent to a sale of encumbered assets, to refinance company debt or long-term financing from Nomura, KKR, Edelweiss, and could not go through.
Malvinder further told the court that in June 2017, FHL was being valued at ₹10,000 crore and in its sale would have received ₹4,400 crore. But now FHL’s value has fallen to ₹8,800 crore.
Ignoring all these excuses, the SC has asked the brothers to come up with a concrete plan to pay up Daiichi’s due.
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