Fortis case: SC refuses to vacate order on IHH’s Rs 4,000 crore open offer

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New Delhi | Published: February 16, 2019 5:07:32 AM

The apex court had on December 14 put on hold the sale of controlling stake (31%) in FHL to IHH on a contempt plea filed by Japan’s Daiichi Sankyo against the former promoters of the hospital chain — Malvinder and Shivinder Singh.

sc, supreme court, fortisThe hospital chain said that violation of the Supreme Court’s December 14 order did not arise as the status quo was ordered only with regard to the “transaction between FHL and IHH”.

The Supreme Court on Friday refused to vacate its earlier order that restrained Malaysia’s IHH Healthcare Berhad from going ahead with its open offer for Fortis Healthcare (FHL).
The Malaysian firm had in July won the bid with its Rs 4,000-crore offer.

The apex court had on December 14 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 Singh and Shivinder Singh. The order for maintaining status quo till further orders of the apex court meant that IHH Healthcare had to wait and could not go ahead with its open offer which was scheduled to commence from December 18.

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A Bench led by Chief Justice Ranjan Gogoi without going into the issue posted the matter for final hearing on February 26 after Daiichi’s senior counsel Fali Nariman requested it to dispose of the case at the earliest.

FHL had earlier told the Supreme Court that its December order was “impacting not only its business and also 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, it said.

The hospital chain said that violation of the Supreme Court’s December 14 order did not arise as the status quo was ordered only with regard to the “transaction between FHL and IHH”. Besides, it said that as on December 14, IHH had already acquired 31% shares of FHL and the latter had already received Rs 4,000 crore by then. And there was no order restraining FHL from undertaking any acquisition of shareholding/assets or seeking loans from FIs, it said, adding that the hospital chain was not even a party before the SC.

Daiichi is attempting to prevent the open offer by wrongly seeking to bring into question the transaction between FHL and RHT Health Trust, which already stands concluded, FHL said in its reply to the application filed by the Japanese firm seeking to restrain any such transfer of funds it received from IHH to RHT Health Trust.

According to it, the impugned order restraining it from transferring Rs 4,000 crore it received from IHH did not cover any transaction with RHT Health Trust, Singapore, in which the Singh brothers allegedly had substantial interest till 2017.

Singh brothers and their entities have no interest in RHT or its assets nor any money has being transferred to them, FHL said. The number of shares in respect of which the contempt is alleged is 12.25 lakh shares which constitute a minuscule percentage which has no impact on the controlling interests, it added.

Daiichi Sankyo is pursuing the enforcement of a `3,500-crore arbitration award against the Singh brothers pronounced by a Singapore tribunal for concealing information regarding wrongdoing at Ranbaxy Laboratories while selling it to the Japanese company for $4.6 billion in 2008.

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