You are here: Home » Companies » News
Business Standard

Not liable for Singh brothers' actions: Fortis backs stake sale in Delhi HC

Fortis Healthcare on Monday said the hospital chain could not be held liable for actions of former promoters Malvinder and Shivinder Mohan Singh

Aashish Aryan  |  New Delhi 

Fortis Healthcare

Distancing itself from former promoters and Shivinder Mohan Singh, Ltd on Monday opposed Co Ltd's plea to stop the sale of its stake to Malayasia's

In its pleadings before the Delhi High Court, the hospital chain said that it was neither a party to the arbitration between the Singh brothers nor to the execution of the Rs 35-billion award and thus, should not be dragged in between. All the undertakings had been given by former promoters who were no longer attached to the company in any way, it said.

The hospital chain was now held by banks and the public, the lawyer appearing for told the court.

Japanese pharmaceutical company had in July this year approached the Delhi HC seeking a stay on Fortis Healthcare's stake sale to IHH Healthcare. Daiichi had moved the petition after had on July 13 said that its board had unanimously accepted a binding offer from Malaysia's IHH Healthcare Berhad, which plans to invest Rs 40 billion in Fortis by way of preferential allotment at Rs 170 per share.

ALSO READ: Fortis Healthcare takes a shot at moving the brand away from controversy

In its petition, had said that the hospital was the only "key" underlying asset of RHC Holding Pvt Ltd, which was its judgment debtor, and that a sale of the hospital chain would mean Daiichi Sankyo would be left with just a paper decree.

RHC Holding, the holding company of Fortis Healthcare, was once equally held by the Singh brothers. After being found guilty by a Singapore Tribunal of fraudulently misrepresenting and concealing the "genesis, nature and severity of the US regulatory investigations" of Ranbaxy when Daiichi Sankyo bought their 34.82 per cent stake for $2.4 billion in 2008, the two brothers had assured the Delhi HC that their stake in the company would always be available for enforcement of the award. The Singapore Tribunal had also asked the Singh brothers to pay Rs 35 billion to Daiichi Sankyo. The judgment was later upheld by the Delhi HC.

ALSO READ: IHH in the driver's seat, analysts expect Fortis to recover in 3 quarters

The two brothers, Daiichi Sankyo has alleged, have subsequently diluted their stake to as low as 0.66 per cent and thus, cheated them of their dues.

The court will next hear Fortis Healthcare's plea on December 10.

First Published: Mon, November 26 2018. 19:19 IST