The Indian subsidiary of Japanese drugmaker Daiichi Sankyo Co Ltd is seeking an interim injunction against brothers Malvinder and Shivinder Singh from selling a stake in Fortis Healthcare Ltd, a person familiar with the development said.
Daiichi has requested the Delhi High Court to pass an interim order to prevent the Singh brothers from selling their stake on the ground that it could dilute the assets that it seeks to recover to enforce an arbitration award, the person said, asking not to be named.
The Japanese company is locked in a legal battle with the Singh brothers for concealing facts when they sold their stake in erstwhile Ranbaxy Laboratories Ltd to Daiichi in 2008.
In May last year, Singapore International Arbitration Centre had ordered the Singh brothers to pay Rs 2,563 crore to Daiichi for allegedly hiding information about drugmaker Ranbaxy. The brothers were also told to pay an additional Rs 950 crore as interest and other expenses to Daiichi.
The Singh brothers then moved the Delhi High Court to challenge the arbitration award. The brothers are now looking to dilute their stake in Fortis Healthcare.
Daiichi’s request to the court was first reported by The Economic Times.
Media reports have previously said that several private equity firms are in talks to invest in Fortis. The hospital chain operator is looking to raise around $250 million through a combination of equity and convertible debt instruments from PE firms, the reports said. The Singh brothers control around 67.6% of Fortis.
An email query to Fortis Healthcare remained unanswered till the time of filing this story. Daiichi Sankyo didn’t make any comment.
The Singh brothers had sold their stake in Ranbaxy to Daiichi for about $4.2 billion in 2008. The deal hurt Daiichi badly and it posted a net loss of $3.45 billion in the year through March 2009.
Ranbaxy also got embroiled in regulatory problems, particularly with the US Food and Drug Administration, soon after Daiichi took over the company. Daiichi agreed to sell Ranbaxy to Sun Pharmaceutical Industries Ltd, India’s top drugmaker, in 2014 for $4 billion including debt.
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