Daiichi Sankyo wants external audit of details given by Singh brothers
NEW DELHI: Japanese drugmaker Daiichi Sankyo wants a third-party auditor to inspect the financial details disclosed by former owners of Ranbaxy in its case at the Delhi High Court to recover about $500 million as part of an arbitration award.
In a new application, Daiichi has sought the court’s permission to induct a separate auditor who could verify the details disclosed in sealed covers by Malvinder and Shivinder Singh, and other respondents. Harish Salve, counsel for the Singhs, objected to this request during the latest hearing on Wednesday.
Since 2013, Daiichi and the Singh brothers have been locked in an arbitration case over the sale of Ranbaxy, once India's largest pharmaceutical company. Justice S Muralidhar has directed the Singhs to respond to Daiichi's latest application and the Japanese firm's affidavit alleging discrepancies in details disclosed by the respondents in sealed covers. The next hearing is on April 17.
“We will be filing our reply to the application. The matter is sub-judice and we cannot offer further comments,” a spokesperson for RHC Holding Pvt Ltd, the holding company for the Singhs, told ET. “Daiichi Sankyo needs third party auditors to review the financials filed by the respondent and their auditor to determine their veracity and accuracy. The earlier CA certificates filed by the respondents pursuant to the court's orders were found to be containing discrepancies and were inaccurate,” Nikhil Nayyar, lawyer-on-record for Daiichi Sankyo, told ET.
Daiichi may also file for contempt of court if the Singhs are found parting with the assets it seeks to recover as part of its award, suggested Nayyar. “Daiichi Sankyo shall pursue the respondents/sellers and purchasers in High Court to ensure compliance with the court’s orders (which prohibit any change in the status of their assets), including by way of contempt of Court,” he said.
Daiichi had first moved an application to block the brothers' reported stake sales in Fortis Healthcare and Religare Finvest in January, fearing such sales would lead to dilution in the value of the assets it seeks to recover as part of its award.
The court has so far not made any decision to stop the respondents from selling their assets. At the same time, it has ordered them not to sell any of their unencumbered assets without first applying to the court.
A Singapore tribunal last year ordered the Singhs to pay Daiichi damages for concealing information regarding wrongdoing at Ranbaxy while selling it for $4.6 billion in 2008. With interests added to the initial award, Daiichi would now get about Rs 3,500 crore if the court verdict went in its favour. The brothers have appealed this award both in Delhi and Singapore.
In a new application, Daiichi has sought the court’s permission to induct a separate auditor who could verify the details disclosed in sealed covers by Malvinder and Shivinder Singh, and other respondents. Harish Salve, counsel for the Singhs, objected to this request during the latest hearing on Wednesday.
Since 2013, Daiichi and the Singh brothers have been locked in an arbitration case over the sale of Ranbaxy, once India's largest pharmaceutical company. Justice S Muralidhar has directed the Singhs to respond to Daiichi's latest application and the Japanese firm's affidavit alleging discrepancies in details disclosed by the respondents in sealed covers. The next hearing is on April 17.
“We will be filing our reply to the application. The matter is sub-judice and we cannot offer further comments,” a spokesperson for RHC Holding Pvt Ltd, the holding company for the Singhs, told ET. “Daiichi Sankyo needs third party auditors to review the financials filed by the respondent and their auditor to determine their veracity and accuracy. The earlier CA certificates filed by the respondents pursuant to the court's orders were found to be containing discrepancies and were inaccurate,” Nikhil Nayyar, lawyer-on-record for Daiichi Sankyo, told ET.
Daiichi may also file for contempt of court if the Singhs are found parting with the assets it seeks to recover as part of its award, suggested Nayyar. “Daiichi Sankyo shall pursue the respondents/sellers and purchasers in High Court to ensure compliance with the court’s orders (which prohibit any change in the status of their assets), including by way of contempt of Court,” he said.
Daiichi had first moved an application to block the brothers' reported stake sales in Fortis Healthcare and Religare Finvest in January, fearing such sales would lead to dilution in the value of the assets it seeks to recover as part of its award.
The court has so far not made any decision to stop the respondents from selling their assets. At the same time, it has ordered them not to sell any of their unencumbered assets without first applying to the court.
A Singapore tribunal last year ordered the Singhs to pay Daiichi damages for concealing information regarding wrongdoing at Ranbaxy while selling it for $4.6 billion in 2008. With interests added to the initial award, Daiichi would now get about Rs 3,500 crore if the court verdict went in its favour. The brothers have appealed this award both in Delhi and Singapore.
