Just 10 years ago, they were the poster boys of India’s booming pharmaceutical industry. Fame peaked for Malvinder Mohan Singh and Shivinder Mohan Singh in 2008 when they sold their stake in generic drug maker Ranbaxy to Japan’s Daiichi Sankyo for a whopping $2.4 billion. It’s only gone downhill from there.

Late last month, Bloomberg reported that the Singh brothers have been taken to Delhi high court by a New York-based investor. The promoters of financial services firm Religare Enterprises allegedly siphoned some $300 million to their privately-held firms. They are also alleged to have funnelled out $78 million from hospital chain Fortis Healthcare.

This follows the high court order for the Singhs to cough up Rs3,500 crore ($550 million) to Daiichi Sankyo for allegedly luring the Japanese drug maker into a deal by withholding information.

Last Thursday (Feb. 08), the billionaire brothers stepped down from the Fortis Healthcare board, which reportedly decided to distance itself from the promoters’ legal battles as they were hurting the firm’s performance. Besides, banks were hesitant to extend even working capital loans to a company associated with the brothers.

In November 2017, Malvinder stepped down from Religare Enterprises—and both he and Shivinder exited the board, making way for a professional management.

The Ranbaxy saga

Ranbaxy in some ways embodied the success of India’s generic drugs industry. Valued at $4.6 billion at the time of its sale in 2008, the company was not just a Singh family jewel, it was India’s moment of reckoning on the global pharma stage.

The story began in pre-independence India in Amritsar, Punjab. Ranbaxy got its name from two cousins, Ranjit and Gurbax, who started a drug distribution firm in 1937. However, after failing to repay a loan, they had to forego their company in 1947 to a businessman, Bhai Mohan Singh, who had come to Delhi from Rawalpindi in Pakistan following Partition.

Under Bhai Mohan, the company launched its first blockbuster drug, Calmpose, in 1961. His son, Parvinder Singh, took the company abroad, setting up plants outside India. Following Parvinder’s death in 2000, Malvinder and Shivinder expanded the horizons beyond pharmaceuticals. Shivinder was still in his first year of MBA, at Duke University in the US, when his father succumbed to cancer.

Parvinder’s brother, Analjit, is a billionaire investor who owns the Max group that runs businesses spanning from hospitals to insurance to real estate. Analjit also owned Vodafone’s India subsidiary until 2014, right around the time the telecom industry went into a spiral in India.

An uncanny knack to exit businesses at just the right time seems to run in the family.

Malvinder and Shivinder, too, sold Ranbaxy at its peak. Just days after the deal, Daiichi got a rude shock from the US drug regulator in the form of an import ban on Ranbaxy, citing poor quality of its drugs. Daiichi sued the Singh brothers in 2013 and sold Ranbaxy to Sun Pharma in 2014. By then, though, the Japanese company had lost Rs6,000 crore, according to one estimate.

The Singhs’ downward spiral may have begun after the Daiichi deal, but they had kicked up enough dust even on their way up. From a whistleblower’s account that led to the US ban to the brothers’ alleged connection with the Clintons, they seemed to tide over all headwinds.

But then, that was 10 years ago.

The Singh brothers have now appealed in the Indian supreme court against the high court verdict favouring Daiichi. They might fight back other charges, too, and the final word may be a few years away. But the stain on their success story is here to stay. The alleged siphoning of funds, in particular, may lead to a wider probe. Market regulator Securities and Exchange Board of India is already examining the issue.

Once renowned for their business acumen and deal-making skills, the Singh brothers today are being subject to scrutiny and litigation, besides derision, in the companies they once owned.