Fortis Healthcare has maintained that it was not involved in the dispute between Daiichi Sankyo and its former promoters, Malvinder and Shivinder Mohan Singh, as the Supreme Court has allowed a forensic audit of transactions involving the hospital chain.
In its regulatory disclosure following the Supreme Court’s September 25 order, Fortis said it was neither a party to the arbitration between Daiichi Sankyo and the Singh Brothers nor a judgment debtor or garnishee in the matter. The company said the independent forensic audit would establish the facts surrounding its role in the transactions.
Fortis said the Singh Brothers’ relationship with the company had effectively ended by March 2018, when their shareholding had fallen below 1% and they had resigned from the board. Institutional shareholders subsequently appointed independent directors to the board.
According to Fortis, the new independent board initiated a competitive process in June 2018 to identify a new investor. Northern TK Venture Pte. Ltd., part of Malaysia-based IHH Healthcare Berhad, subsequently invested in Fortis through a fresh issue of equity shares in November 2018 after receiving the required regulatory and shareholder approvals. Fortis said the transaction did not involve any transfer of shares held by the Singh Brothers.
The Supreme Court declined to interfere with the Delhi High Court’s direction for a forensic audit. However, it clarified that observations made by the High Court regarding Fortis were tentative and intended only for determining whether a forensic audit was warranted. The apex court also directed that the audit be conducted independently and without being influenced by those observations.
The dispute originates from Daiichi Sankyo’s efforts to enforce an arbitral award against the Singh Brothers following their 2008 sale of Ranbaxy Laboratories to the Japanese pharmaceutical company. The forensic audit is expected to examine transactions and trace the movement of assets and Fortis shares connected with the enforcement proceedings.
Fortis has reiterated that the Delhi High Court did not impose any liability, penalty or fine on the company and said it remains committed to corporate governance and regulatory compliance.