New Delhi. An informed source tells us that the Singh brothers, who formerly owned Ranbaxy, are planning an acrimonious split “sometime in 2010”.
When asked for further details, the source would only reveal this much, “Malvinder Mohan Singh and Shivinder Mohan Singh are two of the savviest businessmen in India. They got out of pharmaceuticals at just the right time, selling Ranbaxy to the Japanese at the top of the market. Then they got into hospitals and financial services, and those businesses are already worth a lot. However, what others do not realize is that they are always learning – they know that the Ambani brothers made most of their wealth after their split, not before! And they want to do the same”.
The source then revealed that they have recently hired a number of advisors who had also advised the Ambanis at the time of their split, who have helped them develop this top-secret roadmap:
- Start with a single strong business with lots of cash flow e.g. Reliance / Ranbaxy.
- Diversify the business into unrelated areas, making sure the companies have unclear holding structures and are incorporated in various jurisdictions.
- Have a very acrimonious and public split. Preferably covered live on TV and reported by newspapers with various “insider accounts” and leaks of claims and lawsuits; remember that all publicity is good publicity.
- Make sure no one gets to know the actual financial details of the split. If somebody tries to find out, claim that the settlement is private and the matter is sub-judice.
- Create a few more companies, merge and divide companies randomly, carefully ‘realigning’ holdings so that minority and public shareholders are squeezed out, while each brother emerges with clear majority holdings in each company.
- Do some IPOs, boost share prices, sell at the peak, short-sell, buy at the bottom
- Repeat steps 5 and 6 a few times.
- Decide to have an amicable settlement; merge again.
n.b. This reporter cannot vouch for the effectiveness of the method outlined above.
Adding fuel to the fire, KV Kamath and some senior lawyers from Amarchand Mangaldas were spotted entering the Religare Corporate office for an undisclosed project – regular readers will recall that these were the same advisors who worked on the Ambani split.
While their advisors are yet to work out the details, early indications are that Shivinder will keep the hospital businesses, while Malvinder will keep the financial services business. The large amount of cash generated by the Japanese sale will be left in the custody of their mother, to be provided to whichever part of the group will need expansion funding.
While this reporter couldn’t independently verify this, it appears that the rebranding of the group from ‘Fortis’ to ‘Religare’ was undertaken to prepare for the split. “They are simple men at heart – they figured if two groups called Reliance could be created, then two groups called Religare would also be successful”, said our source.
Unconfirmed reports say that inspired by Reliance ADA, the groups would be called Religare SMS and Religare MMS, though some insiders are worried that this may sound like they are entering the telecom sector.
Both Shivinder Mohan Singh and Malvinder Mohan Singh refused to comment for this article.