Top Indian court lets lenders sell Singhs’ pledged shares in Fortis

India’s Supreme Court allowed lenders to sell shares of Fortis Healthcare Ltd put up as collateral by the hospital company’s controlling shareholders, partially reversing an order that barred them from disposing the stock.Interim orders passed last year to maintain status quo on Malvinder and Shivinder Singh’s 34% stake in Fortis will not apply to shares encumbered before August 11, the two-judge bench headed by Justice Ranjan Gogoi said Thursday. The plea was brought by lenders including Yes Bank Ltd and Axis Bank Ltd About 98% of the Singh brothers’ Fortis shares are pledged or otherwise encumbered, according to regulatory filings for the quarter ended December 31.The top court order is part of an ongoing legal battle between the Singhs and drugmaker Daiichi Sankyo Co, which has turned to India’s courts to collect about $550mn awarded to it by a tribunal in Singapore. The tribunal found the brothers had concealed information during the sale of their generic drug business to the Japanese firm a decade ago. Last month the Delhi High Court ruled the Singapore award is enforceable and this week Daiichi moved the court to execute it. The Singhs have appealed the ruling to the top court.Fortis shares swung between an intraday drop and an advance of about 5% before ending the day with a 0.7% gain in Mumbai. The benchmark S&P BSE Sensex rose 0.4%.Daiichi had moved the top court last year to prevent the Singhs from selling their Fortis shares. The Japanese company’s lawyers Arvind P. Datar and Krishnan Venugopal argued in court Thursday that Daiichi fears it may be left with a “paper decree” and will have nothing to recover if the brothers’ assets are allowed to be sold.The top court’s decision Thursday to allow banks to sell Fortis shares put up as collateral by the Singhs complicates both Daiichi’s attempts to collect on the award and the brothers’ efforts to monetise their assets to deal with their own debts. The borrowings at the brothers’ main holding company, RHC Holding Pvt, stood at about $1.5bn in the latest fiscal year for which there are public records.Malvinder Singh and Shivinder Singh, the original promoters of Fortis Healthcare. A tribunal in Singapore found the brothers had concealed information during the sale of their generic drug business to Japanese firm Daiichi a decade ago.