Fortis under Sebi scanner for ‘lapses’

 

Markets regulator Sebi is examining if there was any possible breach of corporate governance norms and listing guidelines at Fortis Healthcare.

Besides, the country’s two leading stock exchanges — NSE and BSE — which also act as front-line regulators for listed companies’ compliances and disclosures, have sought clarification from Fortis Healthcare relating to the developments unfolding at the company. After Fortis Healthcare’s principal shareholders Malvinder (top) and Shivinder Singh resigned from the board, it came to light that the brothers had taken out a large amount of money from the company and routed the same to entities belonging to them.

n response to clarifications sought by stock exchanges on the related party transaction, Fortis Healthcare said that a Rs 473-crore loan was given to ‘certain corporate bodies’ and that these companies later became promoter group entities because of change in shareholdings. Subsequently, these loans were classified as ‘related party transactions’ and the repayment of the same has since commenced.

“Money released from the company to entities linked to promoters, without shareholders’ knowledge, itself rings an alarm bell,” said Shriram Subramanian, MD, InGovern, a proxy advisory firm. “The relatedparty transactions at Fortis Healthcare and Religare Enterprises (also owned by the Singh brothers) mirrors that of the financial irregularities that took place at Satyam and United Spirits,” Subramanian added.

New York-based private equity firm Siguler Guff & Co, which owns a 6% stake in Religare, has moved the court accusing the Singh brothers of siphoning funds in the form of loans from the financial services firm.

Fortis will declare its Q2, Q3 results on February 13.

Link: Times of India- February 10, 2018