Just ahead of Fortis Healthcare’s extraordinary general meeting (EGM) to decide on the new board of the company, three out of the four directors originally appointed by founders Malvinder and Shivinder Singh while still in charge have submitted their resignations. The EGM was called upon by minority shareholders East Bridge Capital Master Fund and Jupiter India Fund in April who sought the removal of four of Fortis’ board’s independent directors on the grounds of a failure in corporate governance.
Non-Executive Independent Director Tejinder Singh Shergill cited the presence of “sufficient members on the board” in his resignation letter to the company. “As the shareholders have expressed the desire to bring in a new board, I welcome their decision and I would be happy to step down from the Board,” wrote Non-Executive Independent Director Sabina Vaisoha in a communication to the company.
Non-Executive Director Harpal Singh in his resignation letter pointed out that “despite delivering a good outcome for the company and its shareholders there still persist some less informed attempts to steer the board and the company into a situation that could be perilous for the company’s future.” Brian W Tempest, the fourth director against which allegations were imposed of failed corporate governance, was a former CEO at drugmaker Ranbaxy.
The new board of the company will include Suvalaxmi Chakraborty, Ravi Rajagopal and lndrajit Banerjee as independent directors of the company.
Last month, while the four directors – Brian W Tempest, Harpal Singh, Sabina Vaisoha and Tejinder S Shergill – in a joint representation to shareholders earlier had denied allegations that they failed to maintain corporate governance, the two stakeholders had demanded that the matter of removal of these directors from the company’s board be taken up at the company’s EGM on May 22, PTI had reported.
The development comes a few days after the three bidders – Malaysian firm IHH Healthcare Berhad, Manipal Hospital and private equity firm TPG Capital Management – revised their bids on for Fortis Healthcare. The company’s board had decided to evaluate only binding offers.