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Fortis Healthcare said on 27 September that it had no involvement in the ongoing legal dispute between Daiichi Sankyo and the Singh Brothers, stating that it was a “complete stranger” to the matter and played no part in the alleged diversion of the erstwhile promoters’ shareholding. In an exchange filing on Sunday, the company said it had no control over the transfer of shares by its erstwhile promoters, who owned the shares. It added that it did not receive any money or proceeds from the sale or dilution of the former promoters’ shareholding. The company further clarified that after the Singh Brothers’ shareholding fell below 1% and they resigned from the Board of Directors by March 2018, institutional shareholders collectively appointed a group of reputed independent directors. In June 2018, the newly constituted independent Board, with the support of established investment bankers and legal advisors, initiated a competitive bidding process to identify and induct a new investor into the company. Subsequently, Northern TK Venture, the company’s promoter shareholder and part of the IHH Healthcare Berhad group, invested through a fresh issue of equity shares after obtaining all necessary statutory and regulatory approvals, including those from the CCI, SEBI, stock exchanges and the company’s shareholders. The investment was completed in November 2018, several months after the Singh Brothers had ceased to have any association with the company, and did not involve any transfer of shares from them, it added. “The Company remains committed to the highest standards of corporate governance, transparency and regulatory compliance and continues to remain focused on its operations and the interests of all its stakeholders, after its successful turnaround since 2018 under its new Promoter shareholder viz. Northern TK Venture Pte. Ltd., a part of the IHH Healthcare Berhad group,” the company said in the filing. According to Mahesh M Ojha, VP Research & Business Development at Kantilal Chhaganlal Securities, sentiment around Fortis Healthcare has turned negative following the ongoing legal and forensic-audit overhang. Ojha believes that this could keep investors cautious and may result in further downside pressure on the stock in the near term, particularly if there is no clarity on the litigation front. While the company’s underlying operating performance remains relatively resilient, the uncertainty could continue to weigh on the stock price and investor confidence,” the market expert said. Fortis share price ended Friday's session 4.71% lower, closed the day at ₹836 per share on NSE. On the technical outlook, he added that Fortis Healthcare is likely to face resistance in the ₹870–898 zone, and sustained movement above this range would be important for any further upside. On the downside, the stock could see levels of ₹820, ₹800 and ₹770 if weakness persists. Traders holding short positions may consider keeping a stop-loss at ₹872, with targets at ₹820, ₹800 and ₹770,” he added. The Supreme Court on 25 September refused to intervene in a Delhi High Court order directing a forensic audit of Fortis Healthcare Ltd. The proceedings stem from Daiichi Sankyo’s efforts to enforce its arbitral award against former Fortis promoters Malvinder Mohan Singh and Shivinder Mohan Singh. A bench led by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and V Mohana, clarified that the Delhi High Court’s observations against Fortis were only prima facie and tentative in nature. The bench said the forensic auditor must conduct the audit independently and should not be influenced by the High Court’s observations. The Delhi High Court appointed a forensic auditor in August to investigate transactions involving former Fortis promoters Malvinder Mohan Singh and Shivinder Mohan Singh, along with Fortis Healthcare Ltd, in connection with the alleged dissipation of shares. The matter relates to a ₹3,500 crore arbitral award granted in favour of Japanese pharmaceutical company Daiichi Sankyo. Justice Subramonium Prasad said the forensic audit would seek to trace and reconstruct the complete chain of events, enabling the court to identify the individuals and companies involved in the alleged dissipation of shares. The court approved Daiichi Sankyo’s applications seeking the appointment of a forensic auditor to investigate transactions involving Fortis Healthcare Ltd (FHL), the Singh brothers and other parties. The audit will examine transactions that allegedly resulted in the dissipation of assets that could otherwise have been used to satisfy the decree awarded in favour of Daiichi Sankyo against the Singh brothers. Following the order, Fortis Healthcare said the judgment does not impose any monetary liability on the company, which was neither a party to the original dispute nor a judgment debtor in the execution proceedings. Fortis said the court’s direction to appoint a forensic auditor is primarily aimed at conducting a factual inquiry and reconstructing events surrounding the dissipation of Fortis shares by its erstwhile promoters, the Singh brothers. The company added that the appointment of the auditor, by itself, does not impose any liability on Fortis. The court also noted a significant decline in Fortis Healthcare’s shareholding held through Fortis Healthcare Holdings Private Limited (FHHPL), which was controlled by the Singh brothers. (With inputs from agencies) Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions. Vaamanaa covers business and stock market news. Started in 2020, she has been producing news on digital platforms for over 4.5 years now. She writes on markets, commodities, IPOs, and industry. She has worked for news channels like Jagran New Media and Business Insider India. You can reach out to her at vaamanaa.sethi@htdigital.in. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
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