IHH to seek legal advice on Fortis court ruling
KUALA LUMPUR: IHH Healthcare Bhd will seek legal advice on India’s Supreme Court decision over the purchase of the remaining stake in India’s Fortis Healthcare.
IHH said it is not able to proceed with the open offer for the remaining 26% stake in Fortis,
IHH is currently the largest shareholder of Fortis with a 31.1% stake which it had purchased for RM2.34bil.
The healthcare group said due to the order, it would not be able to proceed with the purchase of Fortis “for the time being until further order(s)/ clarification(s)/ direction(s) are issued by the Supreme Court of India and/or the Securities and Exchange Board of India (SEBI)”. IHH clarified that it was not a party to the proceedings before the Supreme Court of India, and that the order does not impact the subscription which was completed on Nov 13, 2018. The subscription saw it owning 31.1% of Fortis.
It said it was evaluating the order and it was seeking appropriate legal advice on this matter and would subsequently decide on the future course of action.
Bloomberg reported a three-judge bench headed by Justice Ranjan Gogoi heard the petition filed by Daiichi Sankyo which alleged former promoters—brothers Malvdinder and Shivinder Singh—violated undertakings and court orders.
Daiichi sought a stay on the Fortis sale as the Singh brothers had not fulfilled their commitment to pay the drugmaker as per the Delhi High Court orders, one of Daiichi’s law- yers told BloombergQuint on the condition of anonymity.
IHH acquired a 31.1% stake in cashstrapped Fortis, which operates about 30 private hospitals in India, in July 2018 after an extended bidding war for control of the company. It had subscribed to 235.294 million new Fortis shares at 170 rupees each or RM9.98 per share. This valued Fortis at approximately RM5.214bil.
Daiichi’s lawyers argued in court that the Singh brothers created encumbrances on their shares even after the court order.
The petition came up for hearing first time yesterday (Dec 14). The court issued notices to Fortis, Indiabulls Housing Finance Ltd, Singh brothers, and their holding companies on the Daiichi plea.