Fortis Healthcare (FHL) on Friday moved the Supreme Court seeking permission to allow Malaysia’s IHH Healthcare Berhad, which had in July 2018 acquired the hospital chain for Rs 4,000 crore, to go ahead with its stalled open offer.
FHL wants vacation of the apex court’s December 14, 2018, order that put on hold the sale of controlling stake (31%) in FHL to the Malaysian firm on a contempt plea filed by Japanese pharma major Daiichi Sankyo against the former promoters of the hospital chain — Malvinder and Shivinder Singh.
The SC order for maintaining status quo till further orders meant that IHH Healthcare had to wait and can’t go ahead with its open offer which was scheduled to commence from December 18, 2018.
Seeking modification of the December order, FHL in a fresh plea stated “if the open offer is allowed to be proceeded with, no monies will be transferred to the Singh brothers or the judgment debtors”.
It further said “Fortis Healthcare Holding (FHHL), an entity controlled by the Singh brothers, holds only 0.15% of the applicant’s (FHL) shares. Therefore, if the open offer is allowed to be proceeded with, insignificant sums will be paid to FHHL (the holding company of FHL)”, and also the sum can be duly protected by the SC. Besides, “substantial monies will be paid to the public shareholders of the applicant”, the application stated.
FHL also told the SC that its status quo order was impacting the interests of various public shareholders who stand to benefit from the open offer by Northern TK Venture (NTK) of FHL’s shares. IHH is also an indirect 100% parent entity of NTK.
On Friday, the matter was adjourned for two weeks after one of the two judges on the Bench recused from the case.
Sebi has also urged the SC to allow the acquirer, Northern TK Venture, Malaysian healthcare major IHH, and Parkway Pantai, to proceed with an open offer to acquire up to 19.70 lakh shares (26% of the expanded voting share capital) of FHL. This is mandatory under the Sebi takeover code, it said, adding that the interested FHL shareholder can exit the hospital chain by accepting the offer in accordance with the relevant provisions of the Takeover Code, 2011.
Daiichi had alleged that the brothers reduced stake of FHL from more than 40% in August 11, 2017, to less than 1% now and FHL diverted the sale proceeds it received from IHH to repurchase the assets of Religare Health Trust, Singapore, in which the Singh brothers allegedly had substantial interest till 2017.
The Supreme Court had last year held the Singh brothers guilty of contempt for violating its earlier orders that had restrained them from divesting their shares in FHL. However, it gave them one more chance to purge themselves of the contempt if each of them deposited Rs 1,170.95 crore. Both the brothers are in Tihar jail in the case filed by Religare FinVest — an arm of Religare Enterprises – for allegedly causing wrongful loss worth Rs 2,397 crore.