Business is a tricky game and the fortunes can change very quickly in this game. People who we see ruling the market one day can experience losses which are not bearable in very short time. A similar scenario has happened with 2 brothers who were touching skies months ago.
Ranbaxy was the largest pharmaceutical company in India when Malvinder and Shivinder Singh sold it to the Japanese firm Daiichi Sankyo for $ 2.4 billion in 2008. After this, the stars have never shown positive signs to these two.
The duo started expanding their hospital chain business across the world. Also, making entry into the financial market with Religare looked like a good move. Now let’s see what are the things that went against them:
1. Allegations of manipulation of fund
The Singh brothers are facing allegations for misusing the funds that investors had put in Religare. Also, their American Drugs Regulator was banned for incorrect manufacturing practices and incorrect data they used in the manufacturing process of drugs.
After this, they were charged for hiding information about the deal with the Japanese company- Daichi and they had to pay a final amount of Rs 3500 crores. Daichi sold Ranbaxy to Sunpharma with a good profit.
2. Expanding without awareness
Expansion is required in every business but this process can ruin the company very quickly if the heads are not conscious of the possible things that can happen. Starting hospital business was a good idea and it was growing at a nice rate. Immediately after selling Ranbaxy, Singh brothers launched a special purpose vehicle company called RHC.
It didn’t stop here, 6 more companies were added to the bucket. All this ended with the failure of hospital chain business with heavy losses.
3. Inability to pay loans
A lot of businessmen these days believe in getting loans from banks for earning high profits, but is it really necessary to do that? Well, in this case, we can say no because the loans also acted as a negative for the duo making them lose their market reputation also. Singh brothers realised this and to make up for the loan, they started selling their property and small investments in businesses. The situation was getting worse and sold Religare health trust that is listed in Australia for a massive amount of Rs 2200 crores.
In spite of all this, 98% of the stake in Fortis is held by financial institutions and they have no money left to start something new.
We are sharing this as we believe that such stories can guide you about the things you should avoid and be careful in taking decisions in business. Risk should be very calculative and based on some knowledge.
