New Delhi: Serious differences have emerged between brothers Malvinder and Shivinder Singh, two former promoters of Fortis Healthcare Ltd, with younger sibling Shivinder at pains to distance himself from the alleged irregularities and decisions taken in the past two years at the hospital chain.
Shivinder Singh, a former executive vice-chairman of Fortis, claimed that he was not in a position of authority when Fortis gave unsecured advances worth ₹ 445 crore to three companies affiliated to the Singh brothers. Malvinder Singh, who stepped down as executive vice-chairman in February, countered by saying that all decisions were taken collectively.
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The allegations and counter-allegations have surfaced after government agencies opened a probe against the brothers following an internal investigation by law firm Luthra and Luthra found mismanagement of funds. The latest development has put the once close relationship between the two brothers to the test.
Shivinder maintained that he had retired and had left for Radha Soami Satsang Beas, a spiritual organization, December 2015. “Post retirement, I continued as a shareholder of the group. My role in Fortis was that of a non-executive board member effective January 2016 till I resigned from the board in February 2018," he said in an interview.
“I had no role in Religare since I stepped off the board in 2010. I got back on the board of Religare in July 2016 when certain mismanagement came to light," he added.
Malvinder reiterated that all decisions at Fortis were approved by designated signatories and alleged that parties with vested interests are being vindictive towards the former Fortis promoters.
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“While we await the Luthra & Luthra report from Fortis Healthcare, (I) would like to mention that there has been no mismanagement or misuse of funds and position. Treasury operations has been a profitable part of the Fortis business for the past many years. All decisions on ICDs (inter-corporate deposits), which were part of the treasury operations, were collectively taken by the respective decision-making bodies at Fortis after deliberations. Presently, there is a vindictive approach from parties with vested interest towards the former Fortis promoters in these challenging times," Malvinder Singh said in an interview.
An email sent to Fortis Healthcare on Friday remained unanswered.
Shivinder Singh claimed that he has no clue about when the audit committee came to know about the ICDs. “I was not a member of the audit or any other sub-committees of the board of Fortis and hence am not privy to that information," he added.
Fortis in its filing to the exchanges on Thursday said that all ICDs between December 2011 and March 2016 were repaid.
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“However, from the first quarter of financial year 2016-17, it has been observed that a roll-over mechanism was devised, whereby ICDs were repaid by cheque by the borrower companies at the end of each quarter and fresh ICDs were released at the start of succeeding quarter under separately executed ICD agreements," it said.
Fortis has initiated legal action to recover these outstanding ICDs and other advances, the company said in a statement to the exchanges. The findings of the investigations have been submitted to the Securities and Exchange Board of India and Serious Fraud Investigation Office.
Cash-strapped Fortis is currently in the process of finding a buyer and has extended the deadline for submission of binding bids to 3 July.