Fortis Healthcare files with Sebi for de-promoterisation of Singh brothers, says chairman Ravi Rajagopal
IHH Healthcare are now officially the promoters of Fortis Healthcare, says the chairman
Mumbai: Fortis Healthcare wants to make severance of all ties with Singh brothers, Malvinder and Shivinder, official.
Fortis has filed an application with Securities and Exchange Board of India (Sebi) for de-promoterisation of Singh brothers as they have "severed" all links with them, chairman Ravi Rajagopal said on Wednesday, adding Fortis has started pursuing legal and other means for recoveries of all dues to Fortis against the erstwhile promoters.
“IHH are now officially the promoters of Fortis and we have applied to Sebi to depromoterise the erstwhile promoters," Rajagopal said during a post-earnings call.
According to the chairman, Fortis Healthcare severed all links with Singh brothers following the Luthra & Luthra report that pointed out systemic lapses and override of control within Fortis Healthcare with respect to inter-corporate deposits (ICDs) that allowed promoters to pump out money from the company.
“Following the Luthra & Luthra investigating report, over the last six-seven months, we have completely severed all links with the former promoters. We have started pursuing legal and other means for recoveries of all dues to Fortis, and following the Sebi orders of October 2018—where their clear directive to us was to cease any direct or indirect dealings with the former promoters—we have done exactly that...and therefore any remnants of related-party transactions has been completely cleaned out," he said.
On Wednesday, Fortis Healthcare declared its December quarter results. Its hospital business witnessed a steady performance, reporting Ebitda margin of 11.2%, up from 9.7% in Q2 FY19.
While revenue growth was marginally lower sequentially, occupancy remained steady at 67.6% as compared to 69% in Q2 FY19 and 62% in Q1 FY19. The diagnostics business, however, was impacted due to seasonality, Fortis said in a statement.
Rajagopal expressed satisfaction at the results. Fortis is now looking at the future, which is one of “optimism" and “positivity", he said in the statement.
“In the last eight months, I think a lot of development has happened... We were facing a lot of challenging situation(s) and our performance was impacted, we were cash-strapped and facing multiple legal issues," Rajagopal said. "We are moving away from the dwarf period. We are now seeing a much more promising outlook."
“There is no denying that the organization is coming out of a challenging period," said Bhavdeep Singh, chief executive of Fortis Healthcare.
"The good news is that 25,000 emoployees are highly engaged, extremely committed to the organisation. The energy levels are strong and positive by virtue of the fact that the major hurdles have been crossed... We believe that there is a lot for Fortis to do in the Indian healthcare landscape".
Fortis Healthcare reported a consolidated net loss of ₹180.11 crore in Q3, mainly on account of exceptional losses. The company had posted a net loss of ₹19.10 crore for the corresponding period of the previous fiscal. Consolidated revenue from operations stood at ₹1,103.27 crore as against ₹1,120.65 crore in the year-ago period. It had a net cash flow of ₹2,359 crore and a net debt of ₹1,339 crore, as on 31 December 2018.
On Wednesday, Fortis shares fell 0.26% to ₹134.55 apiece on the BSE while the benchmark Sensex lost 0.33% to end the day at 36,034.11 points.
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