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The central agency has widened its ongoing probe into alleged financial irregularities at Fortis to also cover the July 2018 deal, which was the biggest foreign direct investment offer in the hospitals space, people in the know said.
This development comes after a Supreme Court order in November 2019. In the past one month, senior members of the Fortis board and its top management have been questioned multiple times by the agency, whose mandate is to probe alleged corporate frauds.
This new line of probe veers from the earlier efforts that focussed more on Singapore-listed Religare Health Trust, which was floated by Fortis founder-promoters Malvinder and Shivinder Singh to house part of their hospital assets.
BCCL
Fortis declined to comment. Attempts to reach SFIO for a comment were not successful till press time Monday.
The takeover drama has been caught in a logjam for over 16 months now.
The Supreme Court had put the Fortis sale on hold in December 2018. When it heard the case again in last November, it refused to lift the stay and questioned the infusion of Rs 4,600 crore by IHH into Fortis to buy back its hospital assets from RHT. The court said this transfer was done in a very “hurried and clandestine manner” and in violation of its 2018 order.
It then ordered that the sale details of the hospital chain be probed into and sought details of Fortis’ board and management. It also initiated a contemptof-court case against Fortis.
Interestingly, Securities and Exchange Board of India is now a party to the case — it has requested the apex court to clear the open offer. The SFIO has also questioned former executives including past CEOs and chief financial officers of the chain, going all the way back to 2012.
“Earlier, the focus was more on evolution of RHT and its relationship with Fortis. Now the IHH transaction is under scrutiny. In that process, some of the current independent directors have also been called for questioning,” said an official on the condition of anonymity. “The biggest FDI involving a marque company that does business in Singapore, China, Turkey and Malaysia is stuck.”
The SFIO has asked Fortis board members to prove that they had not entered into any pre-agreed deal with IHH. They have wondered why a competing bid from a consortium of Sunil Munjal and Anand Burman was not taken for shareholder approval, even after they had decided to pull out of the competitive bidding process.
In June 2018, JM Financial Services Singapore chairman Ravi Rajagopal has been appointed as the chairman of the Fortis board. Rajagopal, also the chairman of the audit committee for Vedanta Resources, was one of the people nominated to Fortis board by a group of shareholders seeking the removal of four of its directors.
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