Former Ranbaxy owners Malvinder and Shivinder Singh were ordered by an arbitration panel to pay Daiichi Sankyo around $525 million related to claims by the Japanese drugmaker that the siblings hid key information while negotiating the sale of the firm in 2008.
Tokyo-based Daiichi Sankyo said in a statement the case was reviewed at the France-based International Court of Arbitration, not the Singapore International Arbitration Centre housed at Maxwell Chambers as reported by Reuters, citing sources.
A statement from RHC Holding, a New Delhi-based firm run by Malvinder Singh, confirmed the award at INR25.63 billion ($385 million). Daiichi Sankyo, publishing its own figures including interest and court costs, put the figure at $525 million.
"As previously disclosed, Daiichi Sankyo believes that certain former shareholders of Ranbaxy Laboratories concealed and misrepresented certain critical information concerning U.S. Food and Drug Administration and Department of Justice investigations at the time of Daiichi Sankyo’s purchase of shares of Ranbaxy in 2008 and was pursuing its available legal remedies," Daiichi Sankyo said in the statement.
"Daiichi Sankyo announced today that it received on May 3, 2016 a final award dated April 29, 2016 in the arbitration in Singapore that Daiichi Sankyo filed with the International Court of Arbitration of the International Chamber of Commerce in November 2012 against the former shareholders. Daiichi Sankyo will announce the financial impact of the award when the timing of collection of the aforesaid amount is confirmed."
The brothers sold their stake to Daiichi for around $2.4 billion as part of an overall deal that saw Daiichi Sankyo pay $4.6 billion for majority control of the firm--which remained listed until last year following its purchase by Mumbai-based Sun Pharmaceutical Industries.
Manufacturing and related quality control problems surfaced after the purchase however and were highlighted by a whistleblower who tipped off U.S. authorities, leading to Ranbaxy pleading guilty to 7 felony charges and a $500 million settlement payment from Daiichi Sankyo.
Daiichi Sankyo subsequently launched the arbitration action. The Economic Times said the brothers plan to appeal the decision, while the statement from RHC noted further legal options are being explored.