IHH infusion into Fortis dubious, clandestine: SC
The Supreme Court has termed IHH Healthcare's decision to infuse Rs 4,600 crore into Fortis Healthcare to buy back hospital assets from Religare Health Trust as very “dubious and clandestine manner, without full facts being brought on record.” Ma...
The apex court said the transfer was in very “dubious and clandestine manner, without full facts being brought on record.”
The court highlighted this particular transaction because Malvinder and Shivinder Singh, former promoters of Fortis, were the biggest unit holders of this Singapore-listed trust that owned several important hospital assets of Fortis around June 2017.
The court said transactions were done with an intent to ensure Daiichi Sankyo does not get the money Singh brothers were ordered to pay to the Japanese drug maker in 2016. “It is obvious that the respondents (Singh brothers) being debtors are manoeuvring, transferring and converting the assets of value, with the desire and intent that the petitioners would not be able to recover the decretal amount as per the award.”
“What is more shocking and clearly contemptuous is the manner in which in a well-thought out plan, Fortis’ authorised capital was increased to transfer controlling interest in the company. Consequently, the controlling interest of Malvinder and Shivinder came down as the company changed hands.”
A bench comprising Chief Justice Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna also asked Fortis to disclose the list of directors and officials actively involved in running of the company during January 2018-2019. The board included Malvinder Singh, his father-in-law Harpal Singh and Brian Tempest, among others, in January 2018. The new board, constituted after IHH bought into Fortis in July 2018, has three directors from Malaysia’s IHH Bhd.
“The Supreme Court has, vide its order dated November 15, directed suo motu initiation of contempt proceedings against Fortis for violation of status quo order granted by Supreme Court on the transfer of controlling stake in FHL to IHH. The order upholds that RHT and other transactions were done to defeat the rights of Daiichi,” said Amit Mishra from P&A Law Offices, representing Daiichi.
Responding to an email query on Friday, IHH said it will “consult with its advisers on its next course of action.” IHH will respond and present its stand on February 3.
Daiichi had filed an affidavit on January 15 to stall transfer of funds from Fortis to RHT. Fortis’ response made it apparent it had completed the transaction that very day. .
Data shows that till June 2017, Shivinder, Malvinder and their family members virtually owned RHT.
“The situation has now changed and now the situation is such that companies, associations of which Malvinder and Shivinder are partners are no longer visibly present and there are other persons who are there. When and how the holdings in Religare Health Trust were transferred is a matter which is required to be gone into,” said the court order.
“The order had in December 2018 directed that status quo with respect to the sale of controlling stake in FHL to IHH Healthcare Bhd should be maintained. We are told that this sale has already taken place.
The matter needs to be inquired into and we have to be certain that when this sale actually took place and when was the controlling stake in Fortis transferred to IHH,” the court order said.IHH infusion into fortis dubious, clandestine: SC