We remain committed to Fortis, says IHH Healthcare MD Tan See Leng

With the latest twist in the Fortis saga thanks to the apex court ordering a status quo on the deal with IHH Healthcare, the Malaysian health care major on Sunday said it remained committed to Fortis. In an internal mailer circulated to Fortis employees and doctors, IHH has tried to allay fears on the future of the deal following the Supreme Court order. 

Business Standard has a copy of the letter. 

Tan See Leng, managing director and chief executive officer of IHH Healthcare, said in an email headlined ‘Staying Strong Together: Fortis and IHH Healthcare’ that the court's direction does not impact the subscription (of shares) which was completed in accordance with applicable law on November 13, 2018. IHH remains the largest shareholder in Fortis, having a controlling stake of 31 per cent by way of equity shares allotted through preferential allotment. 

He said, “This development does not in any way diminish our resolve and absolute commitment to return Fortis to growth. We will continue to execute on our plans to stabilise Fortis and ensure that it achieves its full potential as part of the IHH family." IHH had already made an infusion of '40 billion in Fortis last month to meet the hospital’s immediate capital requirements and in his letter, Tan said IHH would ensure that it (Fortis) continues to operate smoothly. 

Terming the Fortis employees and doctors as the 'heart and soul' of the hospital, Tan said, “We are confident that with your continued support and efforts, we can move forward together to make Fortis India’s leading health care provider.” An email sent to IHH did not elicit and immediate response. 

Hearing a contempt petition moved by Daiichi Sankyo, the Supreme Court issued notices to Indiabulls Housing Finance, Indiabulls Ventures, Oscar Investments, and RHC Holding. Following the news, shares of Fortis fell as much as 14 per cent on Friday, but partially recovered later to close at Rs 141.5 apiece, down 6.7 per cent. 

In a statement on Saturday, Fortis Healthcare said the order did not affect the preferential allotment of shares to Northern TK Ventures, a wholly-owned subsidiary of IHH.

On a similar note, IHH on Sunday reiterated that Fortis and IHH or its subsidiaries were not party to these judicial proceedings. "Nevertheless, in light of the court order, IHH would not be able to proceed with the open offer for the time being," Tan clarified in the letter. 

IHH is evaluating the order, getting clarification from the authorities, and seeking legal advice and would subsequently decide on the next steps.

Sources in Fortis had, however, indicated that the hospital major, now backed by IHH, might move a review petition in the Supreme Court soon. The court reopens on January 2 after the winter recess. 

Sources also said IHH had not filed a caveat in the Supreme Court in the ongoing tussle. At the time of the deal was announced, Tan had told Business Standard that they had taken a “calculated risk”.