Status quo ruled for Escorts Heart deal

The Delhi High Court today ordered status quo on the sale of Escorts Heart Institute and Research Centre to Fortis Healthcare Ltd till November 22, the next date of hearing.

This can be a temporary setback for Escorts which planned to use the proceeds of the sale, close to Rs 650 crore, to repay creditors. An executive close to the sale deal said "most of the money" had already been paid by Fortis to Escorts.

Justice Anil Kumar passed the order while issuing notices to EHIRC, Escorts Ltd, Escorts Chairman Rajan Nanda, his wife and EHIRC Managing Director Ritu Nanda, EHIRC Director GB Mathur, the Registrar of Firms and Societies, Chandigarh, the Registrar of Companies, Jalandhar, and the Registrar of Societies, Delhi.

''There is prima facie evidence that some alleged violation has been perpetuated in the deal,'' the Judge said, adding that Nanda should maintain status quo and not transfer ownership of the company till the matter was decided in court.

On a petition filed by Nanda's estranged brother Anil, challenging the conversion of EHIRC from a charitable institution set up to treat poor patients into a company and a non-charitable body, the court asked all the respondents to file their replies before the next date of hearing.

The petition had sought the court's direction for a permanent injunction on transferring the Escorts hospital to another private company.

Anil Nanda, in his petition, alleged that the hospital was being sold in violation of all rules and regulations as it was established as a charitable institute.

"The late HP Nanda, the founder of Escorts Group of Companies, had conceived the idea of setting up a charitable institute of world fame, to help the weaker sections of society and to create a medical infrastructure for the citizens of India. It is with this vision that EHIRC-Delhi was formed as a charitable society," the petition filed through counsel PK Bansal said.

It was reported in sections of the media that Escorts, which was holding 80 per cent stake in the hospital, was seeking to divest its shareholding to the Fortis group for about Rs 600 crore, the petition said.

The Escorts chairman had, on Wednesday, struck a deal with Fortis to sell 90 per cent equity in EHIRC for Rs 650 crore.