Fine of Rs 2,600 Crore Imposed on Ranbaxy for Misrepresentation
The former promoters of Ranbaxy Laboratories, Malvinder Mohan Singh and Shivinder Mohan Singh, were imposed a fine of Rs. 2,600 crore earlier this week. They have been accused of concealing and misrepresenting facts from Daiichi Sankyo, the Japanese pharmaceutical company. The Singapore Court of Arbitration imposed the fine over the sale of the promoters’ stake to Daiichi in 2008 at a price of $2.4 billion, reports Economic Times.
In 2013, the arbitration case was filed against the Singh brothers by Daiichi. The company had also sought compensation for losses it had incurred in paying the US Department of Justice.
In the same year, Ranbaxy, under Daiichi’s management control was forced into a $500 million settlement with the US Department of Justice. This settlement was a result of accusations by the Department of Justice that the company had faked results of its medicines to get the approval of the Food and Drug Administration.
The US subsidiary of Ranbaxy pleaded guilty of seven felonies connected to the manufacture and distribution of adulterated drugs that had been manufactured in India. Ranbaxy agreed to pay money to settle the lawsuit.
Daiichi finally decided to exit from Ranbaxy in 2014. By then the pharmaceutical company held a stake close to 58% in Ranbaxy at a price of over $4 billion. Additionally, Daiichi decided to merge Ranbaxy with the Mumbai based Sun Pharma, a decision which reached completion in March 2015.
Of the two Singh brothers, Shivinder Singh resigned from his executive duties in the group companies in 2015. Following this, he joined the Radha Soami Satsang Beas, a spiritual and philosophical organization in Amritsar.
Malvinder Singh, former CEO and chairman of Ranbaxy Laboratories, is yet to make an official comment.
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