Stories
SC Questions Daiichi's Stance on Bank Forensic Audit in Fortis Dispute
- •The Supreme Court questioned Daiichi Sankyo's position on the need for a forensic audit of banks in its dispute with former Fortis promoters Malvinder and Shivinder Singh.
- •The bench clarified that the Delhi High Court's forensic audit directions were primarily aimed at Fortis Healthcare Ltd (FHL), Fortis Healthcare Holding Pvt Ltd (FHHPL), and other judgment debtors, not a general inquiry into banks.
- •Banks, including Yes Bank and Axis Bank, challenged the High Court's order, arguing they were not put on notice and such an audit could have serious consequences for regulated institutions.
- •The dispute stems from Daiichi Sankyo's efforts to enforce an arbitral award of approximately ₹2,562 crore against the Singh brothers over the sale of Ranbaxy shares.
- •The Supreme Court's clarification means bank records can be examined only to the extent they relate to specific transactions covered by the audit, not as subjects of a wider investigation.
Key Questions Answered
The Supreme Court questioned Daiichi Sankyo’s stance on the need for a forensic audit of banks, noting that Daiichi was opposing the position of the banks despite earlier telling the Delhi High Court it did not seek a forensic audit of the lenders.
The Supreme Court clarified that the forensic audit was not a general or roving inquiry into the affairs of the banks, but was directed against Fortis Healthcare Ltd, its holding company, and other judgment debtors, with references to the 17 banks limited to their transactions with those entities.
Yes Bank and Axis Bank argued that the High Court directed the forensic exercise without putting them on notice, submitting that such an audit could have serious civil consequences for regulated banking institutions.
