Northern TK Venture (NTK), a subsidiary of IHH Healthcare Group (IHH, 5225, Main Board Healthcare), is seeking up to 109.3 billion Indian rupees (RM5.5 billion) from Japanese pharmaceutical company Daiichi Sankyo, accusing the company of causing losses when it blocked its acquisition of Fortis Healthcare in 2018.

IHH Healthcare Group said in a statement that NTK filed a claim against Daiichi Sankyo in November 2023 for 20 billion yen (RM653 million) in compensation, with 3% annual interest.

However, according to a report prepared by Osborne Partners, a consulting firm appointed by NTK, the claim amount ranges from RM200 million to RM5.7 billion, and the final amount will depend on the applicable parameters.

The report was submitted to the Tokyo District Court on Thursday. IHH Healthcare Group stressed that NTK reserves the right to modify the claim amount, including adding other loss items and requiring Daiichi Sankyo to pay court fees.

The merger dispute dates back to 2018

In August 2018, IHH Healthcare Group acquired 31.1% of Fortis Healthcare for 40 billion Indian rupees (about 2.4 billion ringgit), and planned to acquire a further 26% stake to increase its shareholding to 56%.

However, in December of the same year, Daiichi Sankyo filed a contempt complaint against the Malvinder Singh brothers, the founders of Fortis Healthcare, and the court ruled that the “status quo” of the transaction of Fortis Healthcare’s controlling stake must be maintained. Affected by this, IHH Healthcare Group was unable to advance the acquisition plan and could not take over Fortis Healthcare.

The reason why this acquisition caused controversy was that the founder of Fortis Healthcare was suspected of concealing the fact that Ranbaxy Pharmaceuticals was facing an investigation by the US Food and Drug Administration (FDA) and the US Department of Justice, and sold Ranbaxy’s shares to Daiichi Sankyo under this circumstance.