Japanese drug-maker Daiichi Sankyo told the Delhi High Court on Tuesday erstwhile Fortis Healthcare promoters Malvinder and Shivinder Singh, through a web of downstream companies, had diverted close to ₹2,900 crore. Daiichi has filed three new applications in the high court, stating the monies were parked in 25 companies and this was not declared by the brothers in their affidavits.

The brothers owe Daiichi ₹3,500 crore to settle an arbitration award announced in a Singapore tribunal. The Delhi High Court has to oversee the execution.

Daiichi alleged that the Singhs, through companies controlled by them, gave loans to 25 downstream companies — that were close to 100 times more than the companies’ worth — from 2012 till date.

For example, Shimal Healthcare Pvt Ltd, of which the Singhs are directors, allegedly lent ₹420 crore to eight companies — Best Healthcare, Devera Developers, Fern Healthcare, Modland Wears and Lowe Infra and Wellness through debentures, and to Green Grass Estates, White Feather Estates and Bindas Realtors through equity. Of these, four companies — Modland, Bindas, Green Grass and White Feather — have parked the money in land. While Green Grass has bought 35 acres of land, White Feather has 31 acres of land in Thane district of Maharashtra and Bindas has 2.24 acres in Saket area of New Delhi.

In another application, Daiichi alleged that the Singh brothers — through RHC Holdings, the holding company for ANR Securities, Ranchem and Bhai Trust (of which Malvinder is a trustee) — have parked close to ₹1,450 crore in Prius Real Estate, owned by Gurpreet Singh Sodhi and Ranveer Singh. Prius holds another 10 downstream companies.

Up to an additional ₹1,000 crore has been lent by the brothers and their holding companies to other entities that form a part of Shimal Healthcare and Prius Real Estate.

Daiichi has asked the court freeze such transactions by the downstream companies in which the brothers may have parked their monies.

“All these companies have no purpose but fraud. On what basis has Shimal Healthcare given ₹80 crore, for example, to Best Healthcare? What is the asset base of Best Healthcare? The downstream companies have thin capital and huge loans through debentures and preferences; the money has gone away,” argued Arvind P Datar, Daiichi’s counsel.

Daiichi urged the high court to apply the doctrine of following and tracing to reach to the root of the Singh brothers’ asset base and investments. “A director cannot put in his pockets something at the expense of the company,” Datar further argued.

Akhil Sibal, Malvinder’s legal counsel, argued that the former Fortis promoter cannot give assurances on behalf of 25 companies that are not currently a party to the lawsuit and that Daiichi cannot make downstream companies responsible for a decree passed against him. “They (Daiichi) have done their homework well,” quipped Sibal.

“Unfortunately you are on a weaker ground,” the judge retorted.

The court will serve notice to the 25 companies to file a reply to Daiichi’s application and will hear the matter next on November 13.

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