Ex-Sebi chief M. Damodaran asked to pay Rs 206 cr penalty for breaching contract lawsuit

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Former Sebi chief Meleveetil Damodaran has reportedly been asked to pay up to nearly Rs 206 crore ($24.84 million) as damages by the International Court of Arbitration (ICA) in the US in a dispute involving NYSE-listed UpHealth and Glocal Healthcare Systems. The court has reportedly imposed the fine on Damodaran for breaching a contract lawsuit. Damodaran was a shareholder in Glocal Healthcare Systems. 

Overall, the court had imposed damages to the tune of nearly Rs 920 crore ($110.2 million) against Glocal Healthcare, its promoters, key shareholders and directors, Businessworld reported. 

In its case, UpHealth has claimed that it has paid an amount of Rs 2,100 crore in cash, stock, and debt to acquire a 94.81 per cent stake in Glocal and yet its promoters and directors prevented the transfer of management control and did not share financial statements of Glocal with UpHealth.

UpHealth started arbitration proceedings in the Chicago tribunal under the aegis of the International Chamber of Commerce (ICC). Earlier, when Glocal and its promoters had tried to obstruct UpHealth from moving US arbitration, UpHealth’s lawyers had told an Indian court that the arbitration proceedings and the US venue were as per the terms of the SPA (share purchase agreement) agreed by the parties during the deal.

The dispute arose out of Holdings’ acquisition of Glocal pursuant to a Share Purchase Agreement dated October 30, 2020, and the subsequent breach by Respondents of their contractual obligations to relinquish control of Glocal to Holdings. On March 18, the ICA pronounced the Final Award to the parties. In the Final Award, the arbitral tribunal found the respondents liable for breach of contract.

Damodaran is on the board of many top Indian companies.  After Paytm Payments Bank fiasco, the Board of One 97 Communications Ltd. announced the formation of a Group Advisory Committee chaired by Damodaran to work with the Board in further strengthening compliance and regulatory matters.

As per Bloomberg’s company profile, Glocal Healthcare Systems Private Limited operates as a hospital in Kolkata. The Hospital offers cardiology, orthopedics, opthalmology, gynecology and obstetrics, out-patient, nursing, and pain management services. Glocal Healthcare Systems serves customers in India.

According to Bloomberg, UpHealth provides health care services. The company offers patient-centric digital health platform and tech-enabled services to manage health and integrate care. UpHealth serves patients worldwide.

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