Serious fraud probe against former Ranbaxy owners

Indian government orders serious fraud probe against former Ranbaxy promoters
Earlier this month, the Delhi High Court had allowed Daiichi Sankyo to recover US$ 551 million (INR 35 billion) from Ranbaxy’s Singh brothers. The verdict meant Daiichi can now enforce the award granted by a Singapore arbitration tribunal in April 2016.

Back in 2008, the promoters of Ranbaxy — Malvinder and Shivinder Singh — had sold their stake in Ranbaxy to Daiichi Sankyo, which subsequently exited from the venture.

The Delhi HC ruling is being seen as a significant milestone in India’s corporate governance and functioning of its regulatory institutions.

This verdict was followed by more bad news for the Singh brothers. The government of India has ordered a Serious Fraud Investigation Office (SFIO) probe against the two firms promoted by the Singhs — Fortis Healthcare and Religare Enterprises. The Singh brothers had recently quit the boards of these two companies.

Last week, the Securities and Exchange Board of India (SEBI) ordered an inquiry into Fortis, amid reports that the Singh duo had diverted funds from Fortis. The Singh brothers have denied this charge.

Fortis, which runs a chain of hospitals, has not declared results as auditor Deloitte has refused to sign them due to differences over accounting issues.

Meanwhile, the Delhi Debts Recovery Tribunal (DRT) has restrained Malvinder Singh from selling a posh property in Lutyen’s Delhi and some other assets in a bank loan default case.

The tribunal passed the interim order on an application by Yes Bank seeking recovery of a US$ 88 million (INR 5.7 billion) loan given to Oscar Investment for which Singh was a guarantor. The tribunal also directed Singh to file an affidavit disclosing his movable and immovable assets.

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