Fortis moves SC against stay on stake sale, claims 'great prejudice'

SC had ordered stay on sale of Fortis stake to IHH Healthcare Berhad

Fortis Healthcare on Friday moved the Supreme Court seeking a modification of the December 14 order in which the top court had ordered a stay on the stake sale of the hospital chain to IHH Healthcare Berhad, Malaysia. The company told the apex court it had not been made a party to the petition moved by Daiichi Sankyo Co. 

Sources said Fortis Healthcare claimed the stay was causing it “great prejudice” as it was a listed company engaged in the field of healthcare and was responsible for running many hospitals in Delhi and several other parts of the country. Fortis Healthcare also claimed that Daiichi Sankyo misrepresented facts before the court when it had approached them.

Fortis Healthcare said it would not prefer to comment on the development as the matter was sub-judice.

The Supreme Court had on December 14 had ordered a status quo on an application moved by Daiichi Sankyo. In its petition before the SC, Daiichi-Sankyo had alleged that the Singh brothers and Indiabulls had created fresh encumbrances for nearly 1.7 million shares of the total 2.3 million shares that were left after the top court’s order. Of these, while Indiabulls had created encumbrances for 1.2 million shares, the rest had either been created by Singh brothers or third parties.

This, Daiichi Sankyo had said, was in violation of an earlier order in which the top court had ruled there could be no fresh encumbrances created by Singh brothers and others and had directed to maintain a status quo. The SC had on February 15 last year allowed only banks and financial institutions to sell shares of Fortis Healthcare pledged with them on or before August 31 by the Singh brothers.

In the fresh petition moved before the top court, the healthcare chain has reiterated that neither Malvinder Mohan Singh nor Shivinder Mohan Singh held a significant number of shares in the company enough to affect any decision making process, sources close to the development said.

Fortis had taken a similar approach in the Delhi High Court, where Daiichi Sankyo had moved a petition seeking a stay the stake sale to IHH Healthcare. It had, during one of the hearings, said it was neither a party to the arbitration between the Singh brothers nor to the execution of the Rs 35-billion award and thus, should not be dragged into the case. All the undertakings had been given up by the former promoters and they were no longer attached to the company in any way, Fortis had said.

Fortis Healthcare had in July accepted a binding offer from Malaysia's IHH Healthcare Berhad to invest Rs 4,000 crore in it by way of preferential allotment of shares at Rs 170 apiece. The proposal had also provided for a refinancing debt of Rs 2,500 crore.