Northern TK Venture Raises Damage Claims Against Daiichi Sankyo in Fortis Healthcare Litigation

Malaysia's IHH Healthcare Berhad has announced that its Singaporean subsidiary, Northern TK Venture Pte Ltd (NTK), has raised its damage claim against Japan's Daiichi Sankyo to JPY 199.8 billion, approximately Rs 10,930 crore. This claim is part of an ongoing legal battle in Tokyo concerning the alleged obstruction of NTK's open offer for Fortis Healthcare Ltd and its subsidiary, Fortis Malar Hospitals Ltd.

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NTK is currently pursuing legal action in the Tokyo District Court against Daiichi Sankyo Company Ltd. The lawsuit involves claims related to the hindrance of NTK's tender offer for shares in India's Fortis Healthcare Ltd (FHL) and Fortis Malar Hospitals Ltd (FMHL). On February 6, 2025, IHH's board disclosed that NTK had submitted an additional brief to the court, supported by an expert report from Osborne Partners (OP), which increased the upper limit of their claim.

Increased Compensation Claim

The OP Report outlines that NTK is seeking compensation ranging from Rs 4.24 billion (RM 0.2 billion and JPY 7.8 billion) at the lowest to Rs 109.3 billion (RM 5.7 billion and JPY 199.8 billion) at the highest, depending on applied parameters. This represents a significant increase from the initial JPY 20 billion figure announced on November 14, 2023.

NTK reserves the right to modify its damage claim further, potentially adding other loss categories or legal fee costs sought from Daiichi Sankyo. The case stems from IHH's Rs 4,000-crore acquisition of a 31.1% stake in Fortis Healthcare in July 2018, surpassing rival Manipal-TPG in the process.

Legal Complications and Court Orders

IHH's open offer for an additional 26% stake in Fortis was set to begin on December 18, 2018, concluding on January 1, 2019, with a total value of Rs 3,300 crore. However, in December 2018, India's Supreme Court ordered a status quo on the sale of controlling stakes in Fortis Healthcare to IHH following a plea from Daiichi Sankyo.

Daiichi Sankyo sought to recover Rs 3,500 crore awarded by a Singapore tribunal against former Ranbaxy promoters Malvinder and Shivinder Singh related to Ranbaxy's acquisition. In September 2022, India's Supreme Court issued its final judgment without extending the interim order.

Challenges with Tender Offer

Upon learning of NTK's intent to proceed with the tender offer, Daiichi Sankyo warned SEBI of potential contempt proceedings if SEBI allowed the offer without Delhi High Court permission. Daiichi Sankyo's proceedings against the Singh brothers are pending there. Consequently, NTK has been unable to advance with its tender offer.

This ongoing litigation highlights complex legal challenges faced by IHH and NTK in their pursuit of expanding their stake in Fortis Healthcare amidst opposition from Daiichi Sankyo.