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Fortis Hospitals, parent should recover dues from Singhs, says Sebi

Mumbai: The Securities and Exchange Board of India (Sebi) Friday slightly modified its earlier order on Fortis Healthcare, asking both Fortis Hospitals and its parent company to recover dues from the erstwhile promoters of the hospital chain.

Sebi on Friday said Fortis Healthcare and Fortis Hospitals should take all necessary steps to recover Rs 403 crore, along with the interest due on the principal, from Malvinder and Shivinder Singh.

In October, the regulator had directed only Fortis Healthcare to recover the amount from the Singh brothers and eight entities.

After that order, both Fortis Healthcare and Fortis Hospitals made a representation to the regulator that Fortis Hospitals had advanced the money to Best Healthcare, Fern Healthcare, and Midland Wears.

Fortis Hospitals is a 100 per cent owned subsidiary of Fortis Healthcare.

Based on its preliminary investigation, Sebi had alleged diversion of funds from Fortis by the Singh brothers and it has found these transactions to be “fraudulent” in nature.

The regulator has sought a detailed investigation into the modus operandi of the entire fraud by way of which funds were allegedly diverted from Fortis to its promoters and also said that other third parties, such as banks and auditors, would come under the purview of its scrutiny.

Until the completion of Sebis investigation and further orders, the Singh brothers and these eight entities have been directed to not dispose of or alienate any of their assets or divert any funds without the regulators prior permission, except to repay Fortis and to meet the expenses of day-to-day business operations. The Singhs have also been directed not to associate themselves with the affairs of Fortis “in any manner whatsoever, till further directions,” the earlier Sebi order had said.

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