Malvinder Mohan Singh and Shivinder Mohan Singh, the former promoters of Ranbaxy Laboratories are mulling a challenge to a Singapore arbitration court ruling asking them to pay damages of Rs 2,562.78 crore (about $386 million) to Daiichi Sankyo for “concealing and misrepresenting information” while selling their stake to the Japanese pharmaceutical firm in 2008.
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Ranbaxy, under Daiichi management, had in 2013 paid $500 million to the US Department of Justice pleading guilty to charges of felony.
RHC Holding, a company owned by one-time Ranbaxy controlling shareholder and billionaire Malvinder Singh, also said in a statement that the former owners were considering challenging the verdict.
The statement added that the damage amount to be paid include “quantified interest, costs and expenses of the arbitration till the date of award and interest on above until date of payment, against all the respondents jointly and severally”.
In 2008, the Singh brothers had sold their entire stake of about 35 per cent in Ranbaxy for $ 2.4 billion to Daiichi Sankyo.
Daiichi Sankyo, being an innovator pharmaceutical company, was much bigger in terms of revenues, but Ranbaxy had the lure of a global presence – across developed and developing markets – that Daiichi thought it can leverage.
Malvinder is now the chairman of Fortis Laboratories.
Following this, the USA drug regulator banned products made at Ranbaxy’s Indian plants-in Mohali (Punjab), Dewas, Paonta Sahib and Toansa (Punjab)-from entering the US.
A year later, Daiichi Sankyo sold the around 9% stake which it acquired in Sun Pharma, as a result of that deal, for $3.2 billion and exited India.
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Pranav Mago, head of South Asia for Singapore International Arbitration Centre, declined to comment citing confidentiality agreements. Daiichi spent a total of around Rs 22,000 crore to gain a majority stake in Ranbaxy.
