When Malvinder and Shivinder Singh of drugmaker Ranbaxy's promoter-family decided to exit the company about 10 years ago, there was a low rumble in healthcare circles that Fortis Hospitals too, would meet with a similar fate, someday.

Only none could have forecast that it would come under such strained circumstances.

As the Fortis Hospitals network officially changes hands and gets a new promoter in Dr Ranjan Pai's Manipal Hospitals, it is in a sense a curtain call for the Singh brothers in healthcare. First came the exit from the pharma business and now from the hospitals space too, both segments in which the promoter family had played a high- profile role. Ranbaxy had been a poster boy for the Indian pharmaceutical industry especially under late Dr Parvinder Singh, aspiring to be an Indian multinational. Later under the Singh brothers, the company got entangled in regulatory issues with the United States Food and Drug Administration. But their sell-out in 2008 (just as businesses began to understand the impact of the global economic meltdown) was cited in corporate corridors as an example of timing a perfect exit. Ranbaxy was sold to Japanese drugmaker Daiichi Sankyo for an estimated $4.6 billion, a deal that later went sour as USFDA's regulatory concerns intensified.

But all that came later. When the initial Ranbaxy-Daiichi transaction had been sealed, many an industry expert had cited this as an example of knowing when to exit a business. Mixing business and sentiment was not good, they said, pointing to the Singh brothers' ability to step out of the bidding race for German drugmaker Betapharm and Singapore's Parkway Hospital as examples of sound business decisions.

Arbitration shadow

When it comes to Fortis though the story changes as the souring deal with Daiichi came back to haunt it. Daiichi has since sold its stake to Sun Pharma for $4 billion, but nevertheless proceeded to haul the Singh brothers to the International Court of Arbitration (Singapore) alleging they had concealed critical information at the time of the buy-out, something the brothers deny.

The tribunal awarded damages of ₹2,500 crore, now revised to ₹3,500 crore in interest etc, a decision the Singh brothers contested at many legal levels, including the Supreme Court. But with the SC rejecting the brothers' plea against the arbitration award, they have now approached the Singapore High Court. The case comes up in the second week of April.

For the brothers feted till now for their perfect business timing, the Ranbaxy-related damages have in a sense forced them to distance themselves from Fortis, a business once described as younger brother Shivinder's pet project. Separately, Fortis has other ongoing investigations into its operations on funds extended to the promoters, that reports suggested were allegedly done without due process.

Fortis' management maintain that the liabilities of former promoters and other outcomes are unlikely to impact the deal with Manipal Hospitals. In fact, they point out the brothers' stake in Fortis is anyway sub-one per cent, down to 0.3 per cent from 0.8 per cent. A far cry from when Fortis grew from strength to strength including acquiring a network of 10 hospitals from the then beleagured Wockhardt in 2009.

But this time the predator has turned prey, again, in the case of the Singh brothers. And as legal and other challenges continue to hover over the Singh brothers, the Fortis-Manipal hospitals merger signals a closing of the loop on a high-profile healthcare-centric entrepreneurial family.

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