Shivinder Singh accuses Malvinder Singh of ‘oppression and mismanagement’
Malvinder Singh, left, and Shivinder Singh were once leading Indian billionaires but have had a very public fall from grace © AFP
The brothers at the heart of two of India’s biggest corporate controversies have suffered a dramatic fallout, after Shivinder Singh announced that he was taking legal action against his older brother and former business partner Malvinder for alleged “oppression and mismanagement”.
The Singh brothers, at one time two of India’s richest billionaires, have endured a public fall from grace in recent months after Indian authorities started investigating claims they had siphoned money from Fortis Healthcare, the hospital chain they once ran. The brothers deny the allegations but have given up their positions at the company and forfeited their shares to their banks.
They previously came to international attention with the $4.7bn sale of Ranbaxy, their drugs company, to Daiichi Sankyo of Japan. The deal was the biggest ever foreign takeover of an Indian company but it quickly soured when Ranbaxy was hit by US sanctions for violating quality standards.
The Singhs were later fined Rs35bn ($488m) by an arbitration panel for withholding information at the time of the sale.
Now Shivinder Singh has broken ranks with his brother, accusing him and their business partner Sunil Godhwani of bringing about the “disintegration and ruin of a national healthcare asset”. He said he had filed a case against both men with India’s National Company Law Tribunal.
Malvinder Singh and a representative for Mr Godhwani did not respond to requests for comment.
In a statement released late on Tuesday and widely reported in the Indian media, Shivinder Singh said: “While the group businesses were in ‘competent’ hands, red flags have crept up in the group with disturbing regularity.”
He referred to three specific cases.
First, he mentioned “decisions taken” in the brothers’ finance business, which was fined by India’s central bank in 2017 for handing out loans improperly.
Second, Mr Singh blamed his brother and Mr Godhwani for mismanaging the Ranbaxy sale and the transition period, which he said culminated in “one of the most damaging arbitration cases in the history of India Inc”.
Third, Mr Singh pointed to the “unimaginable losses” run up by Ligare Aviation, the brothers’ private charter airline business. “All these only go to show that the malaise is systemic,” he said.
He did not, however, refer to payments made by Fortis while he and his brother were in control of the company to three other companies which they ended up controlling themselves.
Mr Singh said in the statement that he had retired from active management of Fortis in 2015 to pursue a spiritual retreat with the Radha Soami Satsang Beas, an organisation headquartered in northern India. At the time, he said, the company was “thriving” and “in trusted hands”.
Fortis, which is under new management and is pursuing a sale to Malaysia’s IHH Healthcare, is under investigation for those loans. But the company is suing the Singh brothers to recover tens of millions of dollars it says were paid without proper authorisation.
In the past, the brothers have claimed the payments were made “in the course of normal treasury operations”.
