Japan’s Mitsui & Co is looking to insulate IHH Healthcare Berhad, in which it has major stake, from the ongoing dispute between the promoters of Daiichi Sankyo and tainted Indian businessmen siblings Malvinder Singh and Shivinder Singh.
The Singh brothers had inherited Ranbaxy Laboratories, a pharma company, from their father and later after selling their stake to Daiichi Sankyo founded Fortis Healthcare, a chain of hospitals, but they later lost control due to heavy debt.
IHH Healthcare last year acquired a controlling stake in Fortis after acquiring a 31% stake.
Mitsui & Co has reached out to Daiichi Sankyo, the Economic Times reported, quoting sources. The two sides have been engaged in talks for the past few weeks, they added.
Mitsui hopes Daiichi Sankyo resolves the Fortis matter with IHH in an amicable manner and recovers their dues from the Singh brothers. Daiichi has taken the two brothers to court for a 36 billion rupees (US$500 million) arbitration award granted by a Singapore tribunal in 2016.
The tribunal had held that Malvinder and Shivinder Singh had concealed information that their company – Ranbaxy Laboratories – was facing a probe by the US Food and Drug Administration and the Department of Justice, while selling a 34% stake in their company to Daiichi Sankyo for $2.4 billion in 2008.
The Singapore tribunal had found that Malvinder and Shivender Singh were guilty of making false claims in a self-assessment report, and of misrepresenting and concealing the genesis, nature and severity of the US regulatory investigation.
The US FDA had taken exception about deficiencies in Ranbaxy’s drug manufacturing process in its two plants in India. It then imposed an “import alert,” saying the factory owned by the Indian drugmaker had not ensured manufacturing quality.
The Singh brothers had refused to comply with the Singapore tribunal order and Daiichi had taken up the matter with Indian courts.
The Delhi High Court had ordered in favor of Daiichi Sankyo and the Singh brothers had to resign as directors from the board of Fortis Healthcare in February 2018.
The court had upheld the enforceability of the award passed by a Singapore tribunal, which had found the Singh brothers and others guilty of making false claims in a self-assessment report, and of misrepresenting and concealing facts.
Last week the brothers were arrested by the Enforcement Directorate in a funds misappropriation case.
While hearing their case, the country’s Supreme Court last week found the Singh brothers guilty of contempt of court for violating its order asking them not to divest their shares in Fortis Healthcare.
The Supreme Court had earlier asked the Singh brothers to provide a plan as to how they would honor the arbitral award granted by a Singapore tribunal against them and in favor of Japanese drug manufacturer Daiichi Sankyo.
The court found the former Ranbaxy promoters guilty of contempt of court and said they had violated its earlier order by which the sale of their controlling stakes in Fortis Group to Malaysian firm IHH Healthcare was put on hold.
The apex court said they would later announce the quantum of sentence to the Singh brothers.
Daiichi Sankyo had filed a 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.