Singh brothers step down from Fortis Healthcare board

NEW DELHI:

Fortis Healthcare

promoters Malvinder Mohan Singh and Shivinder Mohan Singh have resigned as directors from the company's board following the Delhi high court order upholding the Rs 3,500-crore arbitral award in favour of Daiichi Sankyo. The Singh brothers have jointly tendered their resignation to the board of Fortis Healthcare, which will discuss it in a meeting on February 13, the company said in a filing to the bourses.

"Malvinder Mohan Singh, executive chairman, and Shivinder Mohan Singh, non-executive vice-chairman, have tendered their resignations from the directorships of the company," Fortis Healthcare said. The resignation is intended to free the organisation from any encumbrances that may be linked to the promoters, a letter from the brothers said. "In light of the recent high court judgment upholding the plea of Daiichi Sankyo to enforce the arbitration award, we believe this is in the interest of propriety and good governance," the letter said.

The Delhi High Court had on January 31 upheld an international arbitral award of Rs 3,500 crore passed in favour of Japanese pharma major Daiichi Sankyo, which alleged that the former promoters of India's

Ranbaxy

Laboratories had concealed information about proceedings against them by the American food and drug department. A tribunal in

Singapore

had passed the verdict in favour of Daiichi, holding that the former Ranbaxy promoters and brothers, Malvinder Singh and Shivinder Singh, had concealed information that the Indian company was facing a probe by the US Food and Drug Administration and the Department of Justice, while selling its shares.

With the resignation of the promoters, the board will be "better enabled and empowered to guide the future direction of the organisation without anyway being hampered by the Daiichi Sankyo judgment and our association at the board", the letter said.

"The members of the board are also requested to look into all inter-group transactions and distance the promoter group from Fortis Healthcare in a manner that enables continuity of the operations of the organisation and deliver on its mission of enriching and saving lives," the Singh brothers wrote in the letter.

The high court order paved the way for enforcement of the 2016 arbitral award passed by the Singapore tribunal against the Singh brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for Rs 9,576 crore. Sun Pharmaceuticals later acquired the company from Daiichi.

Daiichi had approached the high court in 2016 to seek the enforcement of a Rs 2,562-crore Singapore arbitral award passed in April 2016, along with an additional claim of interest and lawyers' fees incurred in connection with the proceedings. The tribunal's award had come after the Japanese company invoked arbitration clause against Singhs alleging that they concealed important information while selling Ranbaxy in 2008.

Daiichi had entered into a settlement agreement with the US Department of Justice, agreeing to pay $500 million penalty to resolve potential, civil and criminal liability. The company had then sold its stake in Ranbaxy to Sun Pharmaceuticals for Rs 22,679 crore in 2015. agencies