Fortis shares jump 24% as Malvinder and Shivinder Singh resign from board

Fortis shares jump 24% as Malvinder and Shivinder Singh resign from board

"The development happens days after the Delhi High Court upheld an global arbitral award of Rs 3500 crore to Daiichi Sankyo against the former promoters of Ranbaxy Laboratories".

However, the total promoter group holding through different entities is 34.43%.

Shares of Fortis Healthcare have erased most of the morning gains on the news that Fortis healthcare loaned $78mn to its promoters Mr Malvinder Mohan Singh, and Dr Shivinder Mohan Singh.

Daiichi had approached the high court in 2016 to seek the enforcement of a Rs 2,562 crore Singapore arbitral award passed in April 2016, along with an additional claim of interest and lawyers' fees incurred in connection with the proceedings.

Fortis's auditor, Deloitte Haskins & Sells LLP, refused to sign off on the company's second-quarter results until the funds were accounted for or returned, the people said, asking not to be identified as the information is private. "The limited review process for Q2 and Q3 results is in progress and already sent to your office by February 7", Fortis said in the BSE filing.

Indian financial markets are still reeling from this week's global equities carnage, with investors losing almost Rs 2.24 lakh crore in the first hour of trading on Friday.

Appealing against the award in India as well as in Singapore's Court of Appeal, the Singh brothers had argued the award money was not enforceable under the laws of India.

The small business lending arm of the Singhs' financial services firm, Religare Enterprises Ltd., made 21 loans to a number of seemingly independent companies that routed at least $300 million back to closely held Singh firms on the same day, according to a central bank investigation of the company's fiscal 2016 books filed in Delhi as part of the suit.

"The results for Q2 could not be tabled before the Board for approval and the same was communicated to the stock exchanges on November 14, 2017", said the statement.

Daiichi had been allowed by the court to enforce the award.

When the Singhs sold their drug company Ranbaxy to Daiichi Sankyo in 2008, the US Department of Justice was investigating a complaint on the basis of a report submitted by whistleblower and company's former employee Dinesh Thakur in 2005. The siblings are contesting that ruling.

A spokesman for Fortis said the company loaned Rs473 crore to "certain corporate bodies in normal course of treasury operations" as of July 2017, and in the third quarter of the current financial year those companies subsequently became part of the Singhs' corporate group.

Although the Ranbaxy case is unrelated to Fortis Healthcare, the legal troubles enveloping the Singh brothers have been hitting shares of the healthcare company, among India's largest hospital operators.

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