Here's the latest news in the saga of the Singh brothers and the guru of Radha Soami Satsang Beas, Gurinder Singh Dhillon. First, a Business Today story, "Singh brothers get a breather from top court." Here's how it starts out.
The Supreme Court (SC) has reserved its order on a contempt plea filed by Japanese pharma company Daiichi Sankyo against the Singh brothers over non-payment of Rs 3,500 crore arbitration award. However, the apex court said it was deciding the issue of 'contempt of court' only. During the hearing, Daiichi told the SC that former Ranbaxy promoter Malvinder Singh had given undertaking in the Delhi High Court, and that the value of their "unencumbered assets" was only Rs 452 crore.
The top court on March 14 had asked the duo to submit a concrete plan for repaying the Japanese firm as well as consult their accountants and financial/legal advisors and appraise it by April 5. But during the hearing on Friday, the bench was miffed at the responses given by the Singh brothers.
Senior lawyers Kapil Sibal, representing Malvinder, had told the bench that the brothers had been duped and that "nearly Rs 6,300 crore has been siphoned off by some 'baba'", while requesting that properties of the contemnor be sold under the instruction of the court. To this, the bench had responded saying that the court will "only adjudicate on the violation of our orders", adding that they can sell their own properties.
Not being familiar with Indian legal language, which differs some from what's used here in the United States, I'm assuming that "reserved its order' means that for now Malvinder and Shivinder Singh aren't being served with a contempt of court order, even though they haven't paid the Rs 3,500 crore [$507 million] arbitration award to Daiichi Sankyo.
So it appears they're being given more time to come up with the money, though the story goes on to say that the Supreme Court justices weren't happy with the progress made by the Singh brothers on this front.
The "baba" who duped the Singh brothers, according to Malvinder Singh's attorney, is Gurinder Sigh Dhillon -- who allegedly siphoned off Rs 6,300 crore from companies once controlled by the brothers. That's $913 million.
It looks to me, from the last paragraph in the excerpt above, that Malvinder wanted the court to order the sale of properties owned by the Dhillon family (and maybe others also) that were bought via the siphoned/fraudulently-obtained Rs 6,300 crore worth of money.
But the court said, "No, you sell the properties on your own."
Much, if not most, of the above-mentioned money went into real estate investments made by the Dhillon family. Another Business Today story, "How Singh brothers got into trouble -- bit by bit," includes mentions of the RSSB guru and his role in the downfall of the Singh brothers business empire. Here's excerpts from the timeline.
The Singh brothers sell their family firm, Ranbaxy Laboratories Ltd - at the time India's largest drugmaker - to Daiichi for $4.6 billion. The US Food and Drug Administration (FDA) cracks down on two of its plants just months later, a development that only snowballs into a bigger mess.
Nearly Rs 2,700 crore from the Ranbaxy proceeds are routed to entities owned by Gurinder Singh Dhillon's family and companies associated with senior Radha Soami Satsang Beas (RSSB) functionaries over three years. Dhillon, better known as 'Babaji', is RSSB's spiritual guru. Of that, Rs 2,000 crore is invested in two firms, Prius Real Estate and Prius Commercial Projects.
Separately, Rs 1,750 crore is invested in Religare Enterprises (REL) and about Rs 2,230 crore in Fortis - again from the Ranbaxy proceeds - to fuel their growth. All these turn out to be fatal mistakes.
The money transferred to Dhillon and associates - estimated to be between Rs 4,000-6,000 crore, with interest, depending on who you ask - remains unpaid to the Singhs. The rapid and reckless expansion spree that REL and Fortis embark on lands them in a debt trap when the slowdown hits in 2009. That's the beginning of a vicious cycle of mortgaging assets and equity in group companies to raise loans to pay off their previous liabilities.
Troubles mount at the Singhs' NBFC REL, under the helmsmanship of family confidante Sunil Naraindas Godhwani, who had come on board on Dhillon's recommendation. The promoters, who had not been on REL's board since April 2010, return this month after subsidiary firm Religare Finvest writes off Rs 794 crore due to non-receipt of dues from Strategic Credit Capital associated with ABG Shipyard. The loan and the write-off are under regulatory scrutiny.
On February 5, Malvinder Singh files a criminal complaint against Shivinder, the Dhillon family as well as the Godhwani kin - Sunil and Sanjay (who headed loss-making REL subsidiary Ligare Aviation). In the complaint filed before the Economic Offences Wing he seeks Rs 8,742 crore owed to him by the alleged accused.
Seemingly the Supreme Court is doing its best to insure that the Daiichi award is paid by the Singh brothers. If they could come up with the $507 million on their own, surely they would have done so by now, since a contempt decree and jail time could await them if they don't pay up.
Thus the spotlight is on Gurinder Singh Dhillon and his family, since they appear to be the ones who ended up with almost a billion dollars siphoned through fraudulent means from companies once controlled by the Singh brothers.
Given that Malvinder and Shivinder are nephews of Dhillon, as well as initiates of the guru, there must be a lot of heated discussion among members of the Dhillon family about this unholy mess. Maybe one day we'll learn about what's going on behind the scenes, if only to provide more of a basis for the plot of a Bollywood movie about this scandal.