Fortis Healthcare tumbles after SC order

Fortis Healthcare slumped 7.23% to Rs 144.80 after the Supreme Court (SC) reportedly held the company guilty of contempt along with Malvinder Singh and his brother Shivinder Singh in a case filed by Japanese firm Daiichi Sankyo.

Japanese drugmaker Daiichi had moved SC to launch contempt proceedings against the Singh brothers for non-payment of Rs 3500 crore arbitral award.

SC reportedly said that Malvinder and Shivinder Singh, who were arrested and jailed in October 2019, can get away from contempt by depositing Rs. 1,175 crore each.

The Singh duo sold Ranbaxy to Daiichi in 2008. Sun Pharmaceuticals eventually purchased Ranbaxy from Daiichi for $3.2 billion.

The case relates to the implementation of the arbitration award that the Singh brothers were ordered to pay to Daiichi in 2016. In March this year, Daiichi had filed a contempt plea against the brothers accusing them of disposing of their assets in violation of the court order.

The Japanese drug maker had blamed the Singh brothers for allegedly suppressing facts during the sale of Ranbaxy.

Further, SC has refused to lift the block on completion of the takeover of embattled hospital chain Fortis Healthcare by Malaysian operator IHH Healthcare Bhd.

IHH's open offer to Fortis shareholders would have brought its holdings in India's second largest hospital company above 50%. IHH is already Fortis' largest shareholder with a 31% stake. IHH's attempt to become Fortis' controlling shareholder was halted last year, when Japanese drugmaker Daiichi Sankyo Co. contested the deal as part of its efforts to recover $500 million from the Singh brothers.

The scrip fell as much as 17.36% to hit an intraday low of Rs 129 in intraday today. It however, recovered from the sudden slump and was trading 12.24% higher from the day's low. The sellers of the stock, currently at 17.66 lakh, heavily outnumbered the 1.22 lakh buyers for the scrip.

Fortis Healthcare reported a profit after tax of Rs 111 crore in Q2 September 2019 as against a net loss of Rs 166.6 crore in Q2 September 2018. Revenues grew 6.3% to Rs 1,212.2 crore in Q2 September 2019 from Rs 1,139 crore in Q2 September 2018.

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