SC holds ex-Ranbaxy promoters guilty of contempt of court

New Delhi, Nov 15: The Supreme Court on Friday held ex-Ranbaxy promoters Malvinder Singh, Shivinder Singh guilty of contempt of court in case filed by Japanese firm Daiichi Sankyo.

The apex curt had earlier asked the Singh brothers to give it a plan as to how they would honour the arbitral award of Rs 3,500 crore granted by a Singapore tribunal against them and in favour of Japanese drug manufacturer Daiichi Sankyo.

A bench comprising Chief Justice Ranjan Gogoi and Justice Deepak Gupta held the former Ranbaxy promoters guilty of contempt of court and said that they had violated its earlier order by which the sale of their controlling stakes in Fortis Group to Malayasian firm IHH Healthcare was put on hold.

The apex court said that they would hear the Singhs on the quantum of sentence later.

Last month, Economic Offences Wing of the Delhi Police arrested Pharma giant Ranbaxy and Fortis hospital former promoter Shivinder Singh and his elder brother Malvinder Singh in a Rs. 740-crore fraud case.

In March, the Economic Offence Wing of Delhi Police had booked the Singh brothers on charges of cheating, criminal conspiracy and breach of trust related to Religare Enterprises and its subsidiary Religare Finvest Limited (RFL).

Shivinder was arrested along with former CMD Sunil Godhwani, Kavi Arora and Anil Saxena.

According to the ED, both the accused, along with others, transferred an amount of approximately Rs 1,000 crore to various persons from entities linked to the corporate loan book and finally, the money was siphoned off.

In August, the ED raided multiple premises linked to Malvinder and Shivinder. The ED is also investigating alleged misappropriation of over Rs 2,397 crore funds in this case and is probing companies like Arch Finance Ltd and RHC limited.

According to police, the complainant stated that the four were having absolute control on REL and its subsidiaries. "They put RFL in poor financial condition by disbursing loans to companies having no financial standing and controlled by them.

The companies to which loans were disbursed willfully defaulted in repayments and caused loss to RFL to the tune of Rs 2,397 crore," Additional Commissioner of Police (Economic Offences Wing) O P Mishra told PTI.

This was also pointed out and flagged during an independent audit by Reserve Bank of India and Securities and Exchange Board of India (SEBI). "The alleged persons systematically siphoned and diverted money of general public in a clandestine manner for their own benefit," Mishra added.

The Japanese firm had filed contempt petition against the former Ranbaxy promoters alleging that execution of their arbitral award had been in jeopardy as the Singh brothers disposed of their controlling stakes in Fortis Group to the Malaysian firm.

Ranbaxy Laboratories Limited was an pharmaceutical company that was incorporated in India in 1961 and remained an entity until 2014. The company went public in 1973. Ownership of Ranbaxy changed twice over the course of its history.

In 2008, Japanese pharmaceutical company Daiichi Sankyo acquired a controlling share in Ranbaxy. In 2014, Sun Pharma acquired 100% of Ranbaxy in an all-stock deal. The Sun Pharma acquisition brought all new management to Ranbaxy.