Anil Nanda's plea rakes up trust issue

In a petition before the Delhi High Court seeking to block the sale of Escorts Heart Institute and Research Centre Ltd (EHIRCL) to Fortis Healthcare Ltd, Anil Nanda, estranged brother of Escorts Chairman Rajan Nanda, has said Escorts Ltd had assured the income tax authorities in Chandigarh that EHIRCL's charitable character would be restored by converting it into a company that would not pay dividends to its shareholders.

Such a conversion would have blocked any chances of the hospital being sold.

"In 2004, Rajan Nanda had admitted that the conversion of the trust into a company was not right and had promised that it would be reconverted to a trust. We had not taken the matter to court then because the sale was stopped. Now, since he is back to selling EHIRCL, we are taking the matter to court," an Anil Nanda spokesperson said.

Anil Nanda has said in the petition that Escorts had agreed to restore the charitable character of EHIRCL after he had objected to an attempt to sell the hospital.

"EHIRCL is a company and has gone through the test on many occasions. Even the buyer (Fortis) has done its own due-diligence. Such deals are not struck just like that. All checks have been conducted," said a key Rajan Nanda aide.

The petition also states that EHIRCL had written to the Registrar of Firms and Societies of Chandigarh on February 2, 2004 that a clause regarding charitable charter in the memorandum of association had been inadvertently left out and that an amended copy of the memorandum would be filed on record.

In view of the undertaking, the plaintiffs had kept quiet as they were assured that the society/company would restore its charitable nature and would not distribute its profit as dividend.