KUALA LUMPUR (Sept 1): India’s Delhi High Court has ordered a forensic audit into how the former Fortis Healthcare Ltd promoters, brothers Malvinder Mohan Singh and Shivinder Mohan Singh, lost their shareholding, IHH Healthcare Bhd (KL:IHH) said on Tuesday.
The audit will also examine how control of Fortis subsequently changed and the roles played by the relevant stakeholders.
The order, dated Aug 31, also directs an examination of the transaction through which IHH acquired a controlling stake in Fortis via its investment vehicle Northern TK Venture Pte Ltd (NTK).
The order arose from applications filed by Japanese drugmaker Daiichi Sankyo Co Ltd against, among others, Fortis, as part of long-running execution proceedings stemming from its dispute with the Singh brothers.
IHH said the court did not impose any liability, penalty or fine on the group or Fortis. IHH also said the group, NTK and PPL (Parkway Pantai Ltd, a Singapore-based, wholly owned subsidiary of IHH) are not parties to the execution proceedings.
IHH said it is reviewing the order with its legal counsel and will evaluate the appropriate course of action in accordance with applicable law. It will make further announcements if there are any material developments.
The dispute dates back to 2008, when Daiichi Sankyo acquired Ranbaxy Laboratories Ltd from the Singh Brothers. Daiichi Sankyo subsequently alleged that the brothers had concealed material information relating to regulatory issues at the pharmaceutical company.
A Singapore arbitration tribunal later ordered the Singh Brothers to pay Daiichi about 25.62 billion Indian rupee in damages, plus interest, in 2016. Daiichi subsequently pursued enforcement proceedings in India to recover the award.
The dispute later spilled into Fortis, then controlled by the Singh Brothers. IHH emerged as a white knight in 2018, acquiring a controlling stake through NTK and triggering a mandatory open offer, which was delayed for years by litigation. India’s Securities and Exchange Board gave its green light to the offer last year, lifting IHH’s stake to 31.17% from 31.1%.
Shares of IHH closed down 10 sen or 1.21% at RM8.15 on Tuesday, giving the private hospital operator a market capitalisation of RM72.01 billion.