Fortis Healthcare Board in its meeting on Tuesday (June 26th, 2018) which ended on Wednesday morning (June 27th, 2018) initiated legal action to recover about Rs. 445 crore of funds taken out of the company by its former founders Malvinder and Shivinder Singh without any information.
The Loan was given to the founders without the approval of the board despite objections from the management. The investigation report by law firm Luthra & Luthra however, absolved the executives of any blame and said they processed the payments under duress.
Fortis had initiated an independent investigation through legal firm Luthra & Luthra in February, following allegations of siphoning of cash by the founding family. The investigation report by Luthra & Luthra has been submitted to SEBI and the Serious Fraud Investigation Office (SFIO). The investigation report showed that there were systemic lapses and override of controls, along with shortcomings in executing documents. Now, on the basis of findings, the board concluded to take legal action
Former founders Malvinder Singh said “While we await the Luthra & Luthra report from Fortis Healthcare, would like to mention that there has been no mismanagement or misuse of funds and position. Treasury operations have been a profitable part of the Fortis business for the past many years. All decisions on ICDs, which were part of the treasury operations, were collectively taken by the respective decision-making bodies at Fortis after deliberations. Presently there is a vindictive approach from parties with vested interest towards the former Fortis promoters in these challenging times.”
Malvinder Singh & Shivinder Singh both of them have resigned as directors from the board of Fortis Healthcare in February 2018, following the Delhi High Court order upholding the Rs. 3,500 crore arbitral award in favor of Daiichi Sankyo.
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