Promoters of Ranbaxy, Malvinder Singh and Shivinder Singh fined Rs 2,600 crore

New Delhi: In a major setback for erstwhile promoters of Ranbaxy Malvinder Singh and Shivinder Singh, an arbitration tribunal in Singapore has asked them to pay Rs 2,562 crore in damages to Daiichi for concealing and misrepresenting information while selling their stake to the Japanese firm.

In 2008, the Singh brothers had sold their entire stake of about 35 per cent in Ranbaxy for $ 2.4 billion to Daiichi Sankyo. The Japanese pharma major had also spent Rs 22,000 crore to gain a majority stake in Ranbaxy.

While Mr Malvinder Singh is currently heads Fortis Healthcare, his brother Shivinder has stepped down from the executive role in the group to join sect Radha Soami Satsang Beas. In 2013, Daiichi had alleged that former shareholders of the company had hidden information about US regulatory probes into Ranbaxy and filed an arbitration in Singapore.

In 2013 Ranbaxy, under Daiichi, was forced to pay $500 million to reach a settlement with the US justice department on accusations that it faked test results to get approval from the US FDA for its products. The company had pleaded guilty to seven felonies relating to the manufacture and distribution of certain adulterated drugs made at units in India. It agreed to pay the money to settle criminal and legal suits.

The arbitration tribunal has issued an award by a majority of 2:1 in favour of the claimant for damages of an amount of Rs 2,562.78 crore, RHC Holding said.
RHC Holding is among the sellers of shares of Ranbaxy, which have been named as respondents in the arbitration suit by Daiichi. RHC said it is exploring further legal options.