Held guilty of contempt in Stake Sale to IHH, Fortis Healthcare exploring legal options

Fortis Healthcare informed that it is currently evaluating the judgement and exploring legal means to address it in an expeditious manner keeping in mind the best interest of all its stakeholders.

New Delhi: Held guilty of contempt for violating Supreme Court's order seeking Singh brothers not to divest their shares in Fortis Healthcare Limited (FHL), the company is now is exploring legal means with respect to the apex court's contempt notice. The healthcare firm is exploring options to address the case in an expeditious manner.

A bench comprising Chief Justice Ranjan Gogoi and Justice Deepak Gupta had held the former Ranbaxy promoters guilty of contempt of court and stated that they had violated its earlier order by which the sale of their controlling stakes in Fortis Group to the Malaysian firm IHH Healthcare was put on hold.

Also Read: Singh Brothers held guilty of contempt by Supreme Court

"It has been advised that the open offer made by IHH Healthcare Berhad to the Fortis shareholders to acquire 26 per cent stake at Rs 170 per share continues to remain in abeyance and would be adjudicated upon in conjunction with the hearing of the contempt petition," Fortis Healthcare said in a BSE filing.

"The Hon'ble Court has issued a suo moto notice of contempt to Fortis Healthcare Ltd for violating the Court order dated December 14, 2018," it added.

The company is currently evaluating the judgement and exploring legal means to address it in an expeditious manner keeping in mind the best interest of all its stakeholders, Fortis Healthcare said.

"The Hon'ble Court has vide the notice sought an enquiry into the consummation of the acquisition of healthcare assets from RHT Health Trust by the company," it added.

The court has also sought an enquiry into whether the subscription by IHH to the shares of the company was undertaken after the status quo order was issued on December 14, 2018, and accordingly, if such subscription was in violation of this status quo order, Fortis Healthcare said.

"The company would be appropriately responding to these concerns of the Hon'ble Court by providing cogent evidence," it added.

The company will take this occasion to present facts before the Court that demonstrate that no part of the proceeds from the IHH transaction was paid to Malvinder Mohan Singh, Shivinder Mohan Singh or any of their controlled entities in any way, Fortis Healthcare said.

The company would also present before the Supreme Court that the IHH transaction was consummated on November 13, 2018, which was more than a month before the status quo order was passed and the same would be adduced before the court during the contempt proceedings, Fortis Healthcare said.

It would also present that the IHH transaction was done through fresh preferential allotment of shares of the company and due approvals was sought for the same through an extraordinary general meeting of shareholders held on August 13, 2018, the firm said.

On the RHT transaction, which was consummated on January 15, 2019, Fortis said it was undertaken in the best interest of the company and at the time of consummation of the transaction, to the best of its knowledge the erstwhile promoters or any of their controlled entities were not unit-holders in the RHT Health Trust," it added.

As a result of this transaction, Fortis bought back hospital properties worth around Rs 4,666 crore by acquiring securities in the RHT Trust's Indian entities that had ownership of these properties, the company said.

In an announcement to Bursa Malaysia, IHH Healthcare has also said that it "remains committed to proceeding with the Fortis Open Offer once the stay is lifted by the Supreme Court of India".

The next hearing date for this matter is February 3, 2020. IHH is seeking appropriate legal advice on this matter and will subsequently decide on the future course of action, it added.

Also Read: Singh brothers, 3 others arrested for massive Rs 2400 crore fund misappropriation in Religare