Shivinder Singh, the younger sibling, broke his silence on Tuesday accusing his brother Malvinder and family friend Sunil Godhwani for systemically undermining the interests of the group companies and their shareholders
Viswanath Pilla & Beena Parmar
The freefall of India’s multi-billion dollar business empire has caused a split between the founding Singh brothers.
Shivinder Singh, the younger sibling, broke his silence on Tuesday accusing his brother Malvinder and family friend Sunil Godhwani for systemically undermining the interests of the group companies and their shareholders.
Shivinder went a step further and filed a case against Malvinder and Godhwani in the National Company Law Tribunal (NCLT) alleging 'oppression and mismanagement' of RHC Holding, Religare Enterprises and Fortis Healthcare.
“This action was long overdue but got delayed in the fond hope that better sense shall eventually prevail and another ugly chapter of family feud would not be written in the glorious history of our family business,” Singh said in a press statement on Tuesday night.
The brothers have lost management control over Fortis and Religare and are facing heat from Japanese drug maker Daichii Sankyo, which is trying to enforce a Rs 3,500 crore arbitration award it got from a tribunal in Singapore. Last month, Fortis shareholders' approved sale of their company to Malaysia’s IHH Healthcare for $1.1 billion.
Shivinder’s emotional outburst and revolt against his brother surprised many, as he never stepped out of his brother’s shadow all these years. “The emotion in the letter looks genuine, but it’s not going to absolve him as it is coming too late,” said person who knew both brothers.
A banker who has dealt with Singh brothers echoed the same. “I would not differentiate between the two brothers, they are trying to come clean but the damage is done. He (Shivinder Singh) should have thought this before. Moreover, why now?” the banker said.
A Delhi-based executive of diagnostic firm that competed with SRL said he is still wondering how these people have lost a fortune. “There was nothing unusual about their lifestyle, they are simple vegetarians. Shivinder is a teetotaller and led a sober life, it’s quite a mystery,” the executive said.Early days
Shivinder pretty much followed his brother footsteps, who is two-and-a-half years older. They went to Doon School, graduated from Delhi’s St Stephens College and completed their MBAs at the same US-based Duke University.
He is said to have drawn up the business plan for Fortis Healthcare when he was 21 years old. He and his older brother, Malvinder, chipped in $5 million to launch Fortis in 1996.
However, it was the sale of drug maker Ranbaxy in 2008 to Japanese pharmaceutical company Daiichi Sankyo – inherited from their father late Parvinder Singh - that helped them rapidly build their business empire with interests across healthcare, financial services, real estate and aviation.
The brothers were sitting pretty on Rs 10,000 crore cash by 2008-end, even as the world was reeling under cash crunch with the collapse of Lehman Brothers and subsequent financial meltdown.
While Shivinder wanted to build the McDonald’s of healthcare, his brother focused on creating a financial services firm with global ambitions.
The brothers went on to use their cash reserves aggressively to build Fortis and Religare. Both companies would go on to build a market cap of $1 billion, as demand for health and financial services grew rapidly in the country.
“My focus and passion has always and solely been Fortis Healthcare since its inception. It is the only company I have worked for and all my intent and resources have been in nurturing this company,” Shivinder said in the letter.
Shivinder was an aggressive and abrasive businessman. He built Fortis through a string of acquisitions, much of it by taking generous doses of debt. His run-in with Dr Naresh Trehan at Escorts Heart Institute & Research Centre (EHIRC) – India’s premier cardiac care hospital were legendary.
“Whatever we touched has turned profitable,” Shivinder once said in an interview referring to Fortis earning a profit of $85 million, even as they lost in bidding war to take control of Singapore-based hospital chain Parkway to Malaysia’s sovereign fund Khazanah.
The brothers, like their father, also became regulars in Delhi's high society, especially becoming patrons of artists and taking part in art auctions and exhibitions.
Shivinder has penchant for Sufi music and often attend concerts in Delhi. His other interest is table tennis. “Shivinder is very bright and likeable guy,” said one of the executive quoted above.Radha Soami connection
In a surprise move in 2015, Shivinder took a hiatus from the business to work full time at the Radha Soami Satsang Beas (RSSB) – the spiritual sect run by his maternal uncle Gurinder Singh Dhillon, also known as Babaji.
There were even reports in some sections of the media about Shivinder succeeding Dhillon as the sect’s leader.
The connections between the sect and Singh brothers are nothing new. It is said that Dhillon played a crucial role in placing his two nephews at the helm of Ranbaxy after a battle for control of the drug maker following Parvinder’s death in 1999.
The relations went beyond family and spiritual guidance. Dhillon family members were also shareholders in companies floated by Singh brothers. Key members of the sect like Godhwani were calling shots in the companies owned by the brothers.
Bloomberg reported that Singhs have loaned Rs 2,500 crore to Dhillon family and companies. But Shivinder strongly defended Dhillon and said they were attempts to defame an 'elder' in the family.
"Recent planted media articles attempting to foist the responsibility of poor decisions taken to an elder in the family, who always stood by us as a father-figure ever since the premature demise of our father, has compelled me to break my silence," Shivinder said.Break-upWhile Shivinder announced that he is disassociating from his brother as a business partner and will be pursuing an independent path going forward, sources told Moneycontrol that the discord had been brewing for some time.
Mint reported in early July that Shivinder Singh tried to distance himself from the unsecured advances worth Rs 445 crore to three companies affiliated to the Singh brothers, claiming that he was not in a position of authority. However, Malvinder, who stepped down as executive vice-chairman in February, countered by saying that all decisions were taken collectively.
“There was some level of discomfort and disagreement between the brothers, but they tried to pretend everything was fine,” said an executive who was in touch with the brothers.The executive said the group’s financial troubles were more to do with the Religare Enterprises – the financial services arm than Fortis. “They were throwing good money earned from Fortis after the badly managed Religare,” the executive above stated.
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