NEW DELHI :
he Supreme Court on Friday held Fortis Healthcare, and its former promoters Malvinder and Shivinder Singh, guilty of contempt of court for sale of shares to Malaysia’s IHH Healthcare Berhad. It also asked the brothers to deposit ₹1,175 crore each to avoid contempt. The SC will next hear the case on 3 February.
Suo motu contempt proceedings were also initiated against Fortis Healthcare for the stake sale, and the court refrained from lifting its stay on IHH’s open offer to buy an additional 26% stake from other Fortis shareholders .
Daiichi Sankyo had moved the SC to stop the Singh brothers from selling their stake until they cleared the ₹3,500 crore in arbitration award.
In 2016, a Singapore tribunal had asked the Fortis promoters to pay ₹2,600 crore to the Japanese drug maker in a case involving Ranbaxy Laboratories’ regulatory issues. The amount had ballooned to ₹3,500 crore with interests.
Following the SC judgement, shares of Fortis slumped 17.4% to hit the day’s low of ₹129 on NSE. The stock recovered its losses to end the day at ₹145, down 8%.
Last December, a three-judge bench headed by Chief Justice Ranjan Gogoi had ordered a status quo on the sale of Fortis to IHH. Another bench, which was also headed by Gogoi, reserved its order on the stay in April.
Some shareholders of Fortis had also approached the Securities and Exchange Board of India (Sebi) in May, asking it to issue directions to IHH to pay interest to shareholders for the delay in the open offer to buy the additional 26% stake in Fortis Healthcare. “We are seeking an 8-10% interest from IHH due to the delay in the offer," a minority investor had said on condition of anonymity.
After a long bidding war, a binding offer by IHH to invest ₹4,000 crore in Fortis was unanimously accepted by the company’s board in July 2018. Fortis was then severely cash-strapped, and IHH clinched the deal by outbidding a consortium of Manipal Health Enterprises and TPG Capital.
IHH has deposited the funds for the open offer in a non-interest bearing escrow account, which is being maintained without demur for the entire period of the stay order.
“IHH is waiting for the written judgement from the Supreme Court to come through, in the wake of its decision. Thereafter, the Group will consult with its advisors on its next course of action," the group said in a statement.
Fortis Healthcare did not respond to Mint’s queries till press time.