New Delhi: Fortis Healthcare Ltd, India’s second-largest hospital chain, has sought a 15-day extension to declare earnings for the second and third quarter of the current financial year citing statutory auditors’ inability to complete the audit before the stipulated board meeting.
The board of Fortis Healthcare was to consider financial results for July-September and October-December 2017 quarters at its meeting on Tuesday. In a regulatory filing, the company said the meeting of the board of directors for Tuesday will go as scheduled and would consider the resignation of promoters, Malvinder Mohan Singh and Shivinder Mohan Singh from the board.
Bloomberg had last week reported that Fortis could not declare the second quarter earnings within the stipulated 45- day period as its auditor, Deloitte Haskins & Sells LLP, refused to sign off on the results until about Rs500 crore that Singh brothers took out from the company without board approval is accounted for or returned.
Called for an explanation by stock exchanges, Fortis had on February 9 stated: “Fortis Hospitals Ltd, a wholly-owned subsidiary of Fortis Healthcare Ltd, has deployed funds in secured short-term investments with companies in the normal course of treasury operations.
“These entities have become part of the promoter group due to a shareholding change in those entities. Subsequently, the same loans have been recognised as related party transactions."
The loans amounting to Rs473 crore are adequately secured and repayment has since commenced, it added. In the regulatory filing on Tuesday, Fortis said it has paid a fine of Rs65.98 lakh to stock exchanges for “non-submission of un-audited financial results for the quarter ended September 30, 2017."
Media reports, it said, had enhanced “the scope of limited review audit by the statutory auditors for the quarters ended September 30, 2017, and December 31, 2017, which we also acknowledge and consider just and equitable in the interest of governance and investors at large." “While the normal audit process was going on smoothly, after the aforesaid news items, our interaction with auditors indicates that the audit process may not complete before the stipulated date of the board meeting," it said.
The board at its meeting on Tuesday would discuss at length the resignation of executive chairman Malvinder Mohan Singh and vice chairman Shivinder Mohan Singh. “The said resignations will reduce the strength of the board from 7 to 5 and a discussion on this will also happen at the aforesaid meeting. This has created an impact on the overall process of completion of the audit process," the filing said.
Fortis sought an extension for approving the financial results of the two quarters till 28 February. The Singh brothers are also facing a lawsuit brought by New York-based private equity firm Siguler Guff & Co, which accused them of “siphoning" money out of another publicly- traded firm they control to help them manage their personal debts, according to Bloomberg.