Fortis under Sebi scanner for alleged corporate governance lapses
New Delhi: Capital market regulator Securities and Exchange Board of India (SEBI) is looking into related party transactions and alleged corporate governance lapses in Fortis group companies promoted by Malvinder Mohan Singh and Shivinder Mohan Singh, Sebi chairman Ajay Tyagi said in New Delhi.
At a briefing after Sebi board’s interaction with union finance minister Arun Jaitley, Tyagi responded to questions relating to delays in Fortis Healthcare Ltd.’s results announcement for the second and third quarters of 2017-18 and on controversial related party transactions of Rs473 crores made by subsidiary Fortis Hospitals Ltd.
“We are examining that. We have also received a reference on Religare. It will be looked into,” said Tyagi. Religare Enterprises Ltd. is another firm promoted by the Singh brothers and others.
Fortis had on Friday informed stock exchanges a second time since November that results could not be tabled before the company’s board of directors for approval as limited review for second and third quarters of 2017-18 was in progress and that unaudited results will be presented before the Board on Tuesday.
The company also told exchanges that Fortis Hospitals has deployed funds with companies in normal course of treasury operations. These entities are now part of the promoter group as of the December quarter due to shareholding changes. The company said that these related party loans are fully secured and repayment has commenced since then. “The total value of the loans amounts to approximately Rs473 crores,” it said.
Religare had informed the exchanges on 5 February that a Delhi high court order upholding a Rs3,500 crore arbitral award in favour of Japanese drug maker Daiichi Sankyo against the Singh brothers’ former company Ranbaxy Laboratories, is “reasonably expected to have no direct impact on the company or its operations.” Religare’s board of directors are expected to meet on Wednesday to consider third quarter results. The Singh brothers last Thursday quit their directorships on the board of Fortis Healthcare following the high court decision.
Emails sent to Religare and Fortis on Saturday remained unanswered at the time of publishing.