Top Court orders forensic audit on sale of Fortis-IHH share

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The Top Court of India today ordered a 2018  forensic audit of the share sale in Fortis Healthcare and denied an open offer from Malaysia’s IHH (Healthcare firm) Bhd to continue, keeping a route in Fortis’s stock. 

A Judgement by a three judge-bench, headed by CJI U U Lalit today also noted that former owners of Fortis Healthcare, Malvinder Singh and Shivinder Singh, to 6 months in jail.

The Pinnacle court ordered an inquiry into sale of shares in Fortis by borrowers and lenders and transfer of money to RHT Health Trust on a plea kept and filed by Japanese firm which do deal with drug making, Daiichi Sankyo Co., which acquired a pharmaceutical company from the fortis brothers in 2008.

A District court will deliver the judgment whether the open offer for Fortis can be permitted based on the facts it gets, the judges said.

CJI noted that “Everything goes back to the executing court”.

Daiichi is requesting an execution of a $500 million award against the group of fortis hospital former owners, the two brothers of fortis, in Delhi HC.

Fortis’ shares jumped up by as much as 19 % on Thursday, the highest since February 2018, during trade  in Mumbai after the ruling of the court’s order.

The judgement delayed the takeover of the embattled chain of hospitals of the company by Malaysia’s IHH that has not been completed for over three years.

In 2017 IHH occupied and took over about a third of Fortis to become its highest shareholder. The open offer for 26% shares would have kept IHH in a high position in the company.

In 2018 August after the first instance of the deal, Fortis embarked on a rebuild with a cost cutting campaign brought by CEO Ashutosh Raghuvanshi.