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Fortis Healthcare board may consider allowing bidders to inspect the assets and books of company’s accounts—a key concern that kept some entities away from the bidding process. Photo: Ramesh Pathania/Mint
Fortis Healthcare board may consider allowing bidders to inspect the assets and books of company’s accounts—a key concern that kept some entities away from the bidding process. Photo: Ramesh Pathania/Mint

Fortis Healthcare investors vote to remove Brian Tempest from board

Fortis Healthcare shareholders approved a resolution to remove director Brian Tempest from the board and appoint three new directors

New Delhi:Fortis Healthcare Ltd shareholders approved a resolution to remove director Brian Tempest from the board and appoint three new directors, indicating that they were not happy with the ongoing sale process.

Two people aware of the matter said that the Fortis Healthcare board may consider allowing bidders to inspect the assets and books of company’s accounts—a key concern that kept some entities away from the bidding process. The board meeting was still on till the time of going to press on Wednesday.

If indeed, the board allows due diligence, it is expected that more companies may join the fray for Fortis.

Tempest’s exit also marks the end of the legacy created by former Fortis promoters Malvinder and Shivinder Singh under whom he served first as the chief executive and managing director of Ranbaxy Laboratories and later as chairman of Fortis.

The hospital chain has received five offers from local and international suitors wanting to invest in the firm or buy it. Its immediate need for liquidity forced the board to ask for only binding offers and prefer bidders who would avoid a due diligence—a decision that many thought has been taken “in haste".

An extraordinary general meeting (EGM) of the shareholders of the hospital operator was held on Tuesday to vote on the removal of its four directors. Three of the four directors—Lt Gen Tejinder Singh Shergill, Harpal Singh and Sabina Vaisoha—had already resigned. Only Tempest, the fourth director, continued to be on the board at the time of voting.

In a regulatory filing, Fortis had said that the resolution for removal of Tempest as director of the company was passed with requisite majority of votes.

“87.91% of the shareholders supported the resolution to remove Tempest and 99.82% of shareholders voted in favour of the resolutions to appoint Suvalaxmi Chakraborty, Ravi Rajagopal and Indrajit Banerjee as independent directors," the hospital said in its exchange filing.

Significantly, all four had voted in favour of the offer by Sunil Munjal’s Hero Enterprises Investment Office and the Burman family office.

“With the three directors who voted against the offer taking control of the board, the bidders may be allowed to do due diligence now," said one of the people, requesting anonymity.

The EGM was sought by a group of minority shareholders, Eastbridge Capital and Jupiter India, which together control about 12% of the company and had called for the removal of the four directors, alleging that they had failed to work in the interest of all shareholders.

Fortis, in the filing, had said that three other directors had tendered their resignations prior to the extraordinary general meeting and, thereby, ceased to be directors of the company, “accordingly, the said resolutions for their removal become infructuous."

Meanwhile, the Manipal-TPG consortium extended the period of its revised offer for the Fortis healthcare board on Wednesday.

According to fling made by Fortis healthcare, it received a letter from Manipal for extension of the acceptance period for the enhanced offer till 6 June, instead of earlier announced 29 May.

According to the Manipal and TPG consortium, the new offer shall remain valid and binding till 6 June for acceptance by the Fortis board and by 20 July for the decision of the stakeholders of Fortis Healthcare Ltd.

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