Fortis arm gave ₹473 crore loan to promoter group firms

THE COMPANY SAID THE LOANS WERE ADEQUATELY SECURED AND REPAYMENT HAS SINCE COMMENCED

NEWDELHI: Fortis Healthcare Ltd on Friday said its wholly-owned arm Fortis Hospitals had deployed funds to the tune of ₹473 crore as secured short-term investments to group firms of its promoters, the Singh brothers.

Responding to a report by Bloomberg, which said, “Singh brothers took at least ₹500 crore rupees ($78 million) out of the publicly-traded hospital company they control without board approval about a year ago”, Fortis Healthcare said the loans are adequately secured and repayment has since commenced as per agreed payment schedule.

The company said with the investee entities becoming a part of the promoter group led by Malvinder Mohan Singh and Shivinder Mohan Singh, as of quarter ended December 31, 2017, the same loans have been recognised as related party transactions expected to be repaid to it by end of first quarter of FY19. “Fortis Hospitals Ltd, (FHsL) a wholly-owned subsidiary of Fortis Healthcare Ltd, has deployed funds in secured shortterm investments with companies in normal course of treasury operations,” the company said in a statement. These entities as of the quarter ended December 31, 2017, have become part of the promoter group due to a shareto holding change in those entities, it added.

Subsequently, the same loans have been recognised as related party transactions in compliance with necessary regulatory requirements. Fortis Healthcare further said: “These loans are adequately secured and the repayment has since commenced as per the agreed payment schedule. The entire amount is expected to be repaid to the company by end of Q1 FY19. The total value of the loans amounts to approximately ₹473 crore.”

The report, citing unnamed sources, had stated the company’s auditor Deloitte Haskins & Sells LLP had “refused to sign off on the company’s secondquarter results until the funds were accounted for or returned.” However, the healthcare chain refuted the allegations, and said the audit review process for results of both second and third quarters were in progress.

On Thursday, the firm informed stock exchanges that the Singh brothers had resigned as directors from the company’s board.