FORTIS BOARD WIDENED TRUST DEFICIT WITH INVESTORS: IIAS

MUMBAI: Institutional Investor Advisory Services, a proxy advisory firm, on Tuesday said that the Fortis Healthcare board and the advisory committee appointed to decide the new owners of the Gurgaon-based hospital chain have widened the trust deficit with investors.

“Investors have called for greater independence at the board level to support an objective decision-making process,” IIAS said in a report. “Administering a selling process that limits the full discovery of price, leaves investors worried that they are being short-changed,” it added.

On April 18, some of Fortis investors such as Jupiter Asset Management Ltd and Eastbridge Group who together hold 12.04% have asked the company to convene an EGM to remove at least four board members and appoint three independent directors on Fortis board.

“Investors have questioned the legitimacy of Fortis Healthcare Limited’s (Fortis) existing board because all its current members have had past tenured relationships either with the Singh brothers, or with companies of the group,” IIAS said.

“If the board continues its current path, we may see another unprecedented event: a Indian class-action suit,” IIAS said. MUMBAI: Lenders to Essar Steel Ltd are evaluating inviting fresh bids as current ones are pegged against the liquidation value, far lower than the fair value of the firm.

The committee of creditors (COC) is expected to meet in the next three days to discuss whether bids should be invited from new resolution applicants considering only 30 days are available to assess the eligibility of the bidder, said two people close to the development.

“We only have a month to assess the eligibility of the new bidder which is very less. Moreover, current bidders are open to negotiations. So we need to take a call whether we should renegotiate or open the ground for new firms as well,” one of the two persons said.

The decision to reject the bids comes after the National Company Law Tribunal directed COC to reconsider the resolution plans submitted by Numetal Mauritius Ltd and Arcelormittal Netherlands NV in the first round. The lenders had earlier rejected the bids of these firms on the basis of the related party clause of the Insolvency and Bankruptcy Code (IBC). The tribunal has also asked both bidders to clear debts in defaulting companies where they hold stakes before bidding for Essar Steel.

“One of the bidders has offered 60% of fair value, while the other bidder has offered 40%, both of which are below the Coc’s expectation,” the two people cited above added.

Meanwhile, JSW Steel Ltd has written to COC to consider its application in case a fresh round of bids is called.