Delhi High Court freezes bank accounts held by Singh Brothers

The Delhi High Court today froze the bank accounts held by former Ranbaxy promoters Malvinder and Shivinder Singh. The Court has asked the Singh brothers to submit bank statements of all bank accounts maintained by them – whether in India or abroad – from the period starting April 2016 till date.

The direction was passed by a Bench of Justice Rajiv Shakdher after he questioned the two brothers in relation to the recovery of a Rs 3,500 crore award passed by an arbitral tribunal in favour of Japanese drugmaker, Daiichi Sankyo.

“For the moment, Malvinder and Shivinder Singh will not operate the bank accounts referred in the statements made by them (before the court under oath).”, said Justice Shakdher while asking them to place on record the details of other bank accounts.

Two other judgement debtors owned by Singh brothers – RHC Holding Pvt Ltd and Oscar Investments Ltd – were also asked to submit bank statements of all bank accounts in their name for the same period.

After questioning the two brothers to ascertain if they would be able to honour their prior assurances to the Court to pay the award money to Daiichi Sankyo, Justice Shakdher said,

“They don’t have any money as they are saying. Why don’t you (Daiichi Sankyo) file for insolvency if you want your money back?”

The Court also directed the Singh brothers to place on record the gift deed through which Malvinder Singh claimed to have transferred the ownership rights of a sculpture/painting worth Rs 7.5 crore to his daughter.

The brothers were also asked to produce the title deed of a property in Singapore owned by Malvinder Singh. The Court further imposed an embargo on the sale of this property without the permission of the Court.

The brothers told the Court on oath that  contrary to some reports, they have no stake in the Religare Health Trust in Singapore, and Prius Commercial Pvt Ltd, which is a real estate company.

Shivinder Singh also said that the brothers’ 100% stake in Fortis Healthcare was “as good as nothing now”.

Appearing for Singh brothers, Senior Advocate Akhil Sibal explained that the brothers’ stake in Fortis Healthcare fell to a mere 0.66% due to the invocation of a “top-up” agreement, which led to the sale of shares by the pledgee banks.

“It’s not that the money went to my pocket. The banks invoked their pledges after the Supreme Court clarified that there was no embargo on the sale of pledged shares”, Sibal said.

To this the Court remarked,

“Why was this not disclosed on any affidavit? How can you state only half facts?”

The Court also refused Sibal’s request to submit the information on bank statements in a sealed cover, saying,

“I don’t do it for any judgement debtor. Why should I do it for XYZ?”

On January 31 this year, Justice Jayant Nath of the Delhi high court had upheld the enforceability of the Rs. 3500 crore award passed by a Singapore tribunal in Daiichi Sankyo’s favour.

The tribunal had found the Singh brothers and others guilty of several counts of misconduct when Daiichi bought their 34.82% stake for $2.4 billion in 2008. The Singh brothers and twelve others were found to have made false claims in a self-assessment report, along with misrepresenting the genesis, nature, and severity of the US regulatory investigations into Ranbaxy.

Daiichi Sankyo was represented by Senior Advocates Arvind Nigam and Arun Kathpalia.

The matter will be heard next on September 5.