Fortis-IHH Share Sale: SC pulls up Banks for deal going through despite Delhi High Court bar

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The Supreme Court of India on February 18 directed 17 banks to former Fortis Healthcare promoters to explain the hospital chain’s share sale to IHH Healthcare, which was conducted despite restrictions placed by the Delhi High Court, CNBC-TV18 reported.

Banks have been asked to disclose specified details to the court by February 22. The 17 lenders include Axis Bank, Indiabulls, Kotak Mahindra Investment and Yes Bank, among others, it said.

The apex court asked banks to disclose details of the Fortis Healthcare shares sold by them since January 17 and has also directed them to disclose details of all encumbered and unencumbered shares of Fortis Healthcare held by them as of 2017.

Prior to this hearing, the SC had in 2019 held Malvinder Singh and Shivinder Singh guilty of contempt of court. It had allowed for purging of contempt charges by depositing of Rs 1,171 crore each.

IHH had bought 31 percent controlling stake in Fortis Healthcare for Rs 4,000 crore in July 2018.

This triggered a mandatory open offer to acquire another 26 percent of Fortis shares from the market.

IHH Healthcare on February 8 said its intent to continue on its growth plans for Fortis Healthcare, and the transaction to acquire the latter was done with the necessary corporate and regulatory approvals in accordance with all applicable laws.

The acquisition of Fortis, however, has been its single biggest bet in India. However, it couldn’t make progress on its mandatory open offer to acquire a 26 percent stake due to a Supreme Court stay order.

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