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Bhai Mohan mulls legal action against Ranbaxy 

Veeshal Bakshi  
New Delhi, July 3: Ranbaxy Laboratories' founder and chairman emeritus Bhai Mohan Singh is contemplating legal action against the company if it continues to dither on the implementation of a 1994 arbitration award on the family settlement agreement which his late son and chairman Parvinder Singh had promised to follow.

"I am not intending to go to court against Ranbaxy right now but could be forced to do so if things remain at a standstill," the 83-year old Singh told The Financial Express in an exclusive interview.

"The arbitration award was given by former Chief Justice of India ES Venkataramiah in May 1994. My son (late Parvinder Singh) never objected to the award and it became a rule of court in December 1995. He promised to implement the award, but unfortunately, never did so," Singh told The Financial Express.

Some of the directions given by Justice Venkataramiah in his arbitration award were:

  • Bhai Mohan Singh should be treated as a permanent invitee to all the meetings of the board of directors. He should be sent a notice of all the meetings with the agenda.
  • Parvinder Singh should meet Bhai Mohan Singh at least for one day every month to apprise him of all developments and seek his advice.
  • Ranbaxy was to maintain Bhai Mohan Singh's office at his residence, and provide necessary secretarial assistance consistent with his status.
  • Ranbaxy should meet all travel expenses of Bhai Mohan Singh both in India and abroad.
  • Bhai Mohan Singh and Parvinder Singh should concur on all appointments, reappointments, elections/re-elections to the board of directors before Parvinder Singh exercised the voting rights on his shares.
  • Parvinder Singh would pay Rs 15 lakh to Bhai Mohan Singh by way of costs of arbitration proceedings.
  • Parvinder Singh should initiate steps to establish a Foundation to perpetuate the name of Bhai Mohan Singh with at least Rs 5 crore to be contributed either by restructuring the Trust allocated to his groups and/or by contributing separately in cash for such purposes.

    "Neither Parvinder and his family nor Ranbaxy Laboratories has honoured the directions of the award," alleges Bhai Mohan Singh. He adds: "I am not making any fresh demands. I am only asking for implementation of the provisions of the family settlement agreement signed in 1988 and the subsequent arbitration award," Singh said. A spokesman for Ranbaxy declined any comment in this matter saying this was a family dispute.

    The Ranbaxy family patriarch said his grandsons and Parvinder Singh's son, Malvinder and Shivinder, were being deliberately kept away by some vested interests from the management of Ranbaxy Laboratories in the name of running the company under a professional management even though they own a 33 per cent equity stake in the company.

    "My grandsons have to be groomed right from this stage as working directors or members of the managing committee to take over the mantle of the company. They should travel overseas and within India with chairman Tejendra Khanna and managing director DS Brar to meet the joint venture partners. I myself groomed my eldest son (Parvinder Singh) right from his young days to take over the reins of the company," he said.

    "Would those who talk of professional management say that Reliance, Ballarpur Industries, RPG group and Raymond have unprofessional managements because the next generation of the promoters are at the helm of these companies? Even in my time as chairman and managing director, the entire top management of Ranbaxy was professional," Singh said.

    "I am not after money. What will I do with money at this age? I gave away Ranbaxy to Parvinder Singh in my lifetime as part of the family settlement to stop bickerings between my three sons. I distributed my wealth to my sons with my own hands. It was only after I gave away the control of Ranbaxy to Parvinder that he started disregarding me. Now, I only want my honour and respect to be restored. I want recognition of my role in making Ranbaxy what it is today," a visibly emotional Singh said.

    Singh, who resigned from the chairman and managing director's post in February 1993 citing Parvinder Singh's misbehaviour with some of the other board members, said most of the directions in the arbitration award were not followed by his son and, after his death, the present management.

    Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.

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