The hopes of Malvinder Mohan Singh and Shivinder Mohan Singh to arrive at a settlement with Religare Finvest Limited (RFL) went into a tizzy on Wednesday after Daiichi Sankyo approached the Delhi High Court with a plea to stop the said talks. In their plea, Daiichi Sankyo, which is pursuing the execution of the Rs 3500 crore arbitral award, has said that the Singh brothers should first settle their claims before offering settlement to any other parties.
In its verbal observation, the Delhi High court on Wednesday morning said that the settlement talks between Singh brothers and RFL cannot proceed without seeking permission from it first. Later in the day, Daiichi Sankyo moved an application seeking to stop the settlement talks.
Japanese drug major Daiichi Sankyo has been fighting a prolonged legal battle with the Singh brothers to get its Rs 3,500-crore arbitration award, based on the judgment by a tribunal. A tribunal in Singapore had held the Singh brothers guilty of lying and concealing information when they had sold their stake in Ranbaxy Laboratories to Daiichi Sankyo in 2008.
The tribunal had held that the brothers had, while selling their stake in Ranbaxy to Daiichi in 2008, hidden information regarding a probe the company was facing from the US Food and Drug Administration and the Department of Justice. To resolve the potential civil and criminal liability that could have arisen due to the suit by both the US agencies, Daiichi had agreed to pay $500 million as part of the settlement agreement. Daiichi had later sold its stake in Ranbaxy to Sun Pharmaceutical Industries in 2015 for a sum of Rs 22,679 crore.
Following their arrest by the Economic Offences Wing (EOW) of the Delhi Police, both Malvinder and Shivinder had moved an application before the lower court seeking interim bail. In their plea, the brothers had said that if granted interim bail for two months, they would try and settle the issue with RFL. They had also said that granting them interim bail would not prejudice the case as all the said evidence in the case was documentary and already in possession of investigating agencies.
On Tuesday, the Saket district court had allowed the Singh brothers to go ahead with the settlement talk and inform the court on Tuesday about the status of the talk. The settlement talks remained inconclusive as no proposal was presented by the Singh brothers, the Saket district court hearing the case was informed on Wednesday.
The Singh brothers, who are currently lodged in Tihar jail, have last week sought an interim bail of two months for settlement talks. They had been arrested by the EOW of the Delhi Police on October 11 in a case of fraud and misappropriation of funds to the tune of Rs 740 crore linked to RFL. The EOW action followed a complaint filed by RFL, a subsidiary of Religare Enterprises Limited (REL).
RFL had filed a criminal complaint against the Singh brothers, Godhwani and others for cheating, fraud and misappropriation of company funds to the tune of Rs 740 crore in December. The misappropriation came to light after an independent forensic audit was conducted by the new board. The audit followed the exit of the Singh brothers from the company in February.
In the complaint, RFL had also said that the Singh brothers and others had cheated the company through misappropriation, siphoning and diversion of funds through a labyrinth of financial transactions. Calling it a “well thought out and organised criminal conspiracy’’ through which a financial scam of huge magnitude had been executed, RFL said the promoters and executives in question had also siphoned off funds from REL, the parent firm. REL was controlled by the warring Singh brothers until February 2018.
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