Shivinder Singh, the former promoter of Ranbaxy and Fortis, has filed a personal insolvency application with the National Company Law Tribunal (NCLT) in Delhi. The plea was made under Section 94 of the Insolvency and Bankruptcy Code, which allows individuals or personal guarantors to start insolvency proceedings.
The case was briefly heard by Justice Mahendra Khandelwal and Technical Member Subrata Kumar Dash, but the matter has now been postponed to May.
During the hearing, Singh explained that his financial liabilities have surpassed his total assets. Due to several legal cases, most of his assets have been either sold or seized, leaving him unable to repay the debts he owes as a personal guarantor.
Shivinder Singh Files for Personal Insolvency
Shivinder Mohan Singh, the former promoter of Fortis Healthcare and Religare Enterprises, has filed a personal insolvency plea with the National Company Law Tribunal (NCLT) in Delhi. This step comes after Singh found himself in a situation where he cannot repay his debts. The case was heard briefly on April 21, but it has been postponed to May for further proceedings.
Shivinder Singh’s insolvency plea is based on Section 94 of the Insolvency and Bankruptcy Code (IBC). This law allows an individual to file for insolvency if their debts exceed their ability to pay them off. In his application, Singh has explained that his current liabilities (what he owes) are greater than the assets (properties and possessions) he still owns.
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Shivinder Singh’s Past Business Success
Shivinder Singh, along with his brother Malvinder Singh, was once very successful in the business world. They became well-known after selling their controlling stake in Ranbaxy Laboratories, a major pharmaceutical company, to the Japanese company Daiichi Sankyo in 2008 for around $4.6 billion.
This deal was seen as a huge success, and the brothers used the money to expand into new businesses like Fortis Healthcare, a private hospital chain, and Religare Enterprises, a financial services company.
Legal Trouble After the Ranbaxy Deal
However, the deal with Daiichi Sankyo soon became controversial. The Japanese company accused the Singh brothers of not revealing important problems related to Ranbaxy before the sale.
Daiichi Sankyo claimed that the Singh brothers knew about serious issues, including investigations by the US Food and Drug Administration (FDA) and the US Department of Justice, but did not inform the buyer at the time of the sale. These investigations were related to regulatory and legal problems with Ranbaxy’s drug manufacturing practices.
This controversy led to legal battles, which added to the financial troubles of Shivinder Singh and his brother, ultimately leading to Shivinder’s decision to file for personal insolvency.
Shivinder Singh Brothers’ Legal Troubles Deepen
In 2016, an arbitration panel in Singapore ruled in favor of Daiichi, finding the Singh brothers guilty of misleading the company. The tribunal ordered them to pay Rs 3,500 crore in damages. Indian courts later confirmed this decision and began steps to recover the money. As a result, several personal and business assets, including shares in RHC Holding Pvt. Ltd., were either seized or sold.
In his petition, Singh claimed that years of legal battles, forced asset sales, and poor financial handling at RHC Holding, where he was a corporate guarantor, have pushed him deep into debt, far beyond his current assets.
If the National Company Law Tribunal (NCLT) accepts his insolvency plea, a resolution professional will be appointed to assess his financial situation, coordinate with creditors, and create a repayment plan. This plan will then need the tribunal’s approval.
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FAQs
Q.1. Who is Shivinder Singh?
Ans. Shivinder Singh is the former promoter of Ranbaxy Laboratories, Fortis Healthcare, and Religare Enterprises, once known for his successful business ventures with his brother Malvinder Singh.
Q.2. Why did Shivinder Mohan Singh file for personal insolvency?
Ans. He filed for personal insolvency due to debts exceeding his assets, largely caused by legal cases, asset seizures, and a Rs 3,500 crore arbitration ruling against him.
Q.3. What is Section 94 of the Insolvency and Bankruptcy Code (IBC)?
Ans. Section 94 of the IBC allows individuals or personal guarantors to start insolvency proceedings if they are unable to repay their debts.
Q.4. What happened in the Daiichi Sankyo arbitration case?
Ans. In 2016, a Singapore tribunal ruled that the Singh brothers misled Daiichi Sankyo during the sale of Ranbaxy and ordered them to pay Rs 3,500 crore in damages.
Q.5. What will happen if NCLT admits Singh’s insolvency plea?
Ans. If admitted, a resolution professional will be appointed to evaluate his finances, work with creditors, and draft a repayment plan for NCLT’s approval.
