Indian court orders probe in Fortis asset diversion case, Malaysia's IHH says
India’s Delhi High Court has ordered a forensic audit into alleged asset dissipation by former promoters of Fortis Healthcare, Malaysia’s IHH Healthcare said on Tuesday. The fact-finding enquiry would investigate the alleged disposal of the former promoters’ Fortis shareholding, subsequent change in the control of the Indian hospital operator, and the role of the relevant stakeholders, IHH…
India's Delhi High Court has mandated a forensic investigation into alleged asset misappropriation by former Fortis Healthcare promoters, according to Malaysia's IHH Healthcare. The inquiry will examine the transfer or loss of Fortis shares, the shift in control of the Indian hospital operator, and the involvement of pertinent stakeholders, as per IHH Healthcare.
The term "asset misappropriation" refers to the depletion or diversion of assets, which diminishes the amount available to creditors, shareholders, or other claimants. The dispute is centered around Daiichi Sankyo's claim that former Fortis promoters, Malvinder Mohan Singh and Shivinder Mohan Singh, transferred or disposed of assets that could have been utilized to fulfill an arbitration award awarded to the Japanese pharmaceutical company in 2016.
The Singh brothers and affiliated parties were ordered to pay 25.62 billion rupees ($269 million) to Daiichi by the Singapore tribunal in 2016. Daiichi has notified the Delhi court that the outstanding sum has since grown to 53 billion rupees. IHH Healthcare acquired roughly a third of Fortis Healthcare in 2018, prompting a mandatory takeover offer for an extra 26% stake.
IHH had to suspend the takeover offer following a contempt petition filed by Daiichi Sankyo against Fortis' promoters. IHH stated on Tuesday that it is not a party to the enforcement proceedings against the former Fortis promoters. The Delhi court's order from Monday has mandated an examination of IHH's stake acquisition in Fortis through Northern TK Venture Pte.
Fortis stated that it has taken note of the court ruling, which it said does not impose any financial responsibility on the company and does not "in any way, by itself, result in fastening of liability on Fortis". IHH is one of the world's largest private healthcare groups, operating 190 facilities in 10 countries, including Malaysia, Singapore, Türkiye, and India. Fortis manages 36 healthcare facilities with over 6,000 beds across India.
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