SC Grants More Time To Fortis Founders To Pay Deposit

The Supreme Court has granted more time to Fortis Healthcare Ltd’s founders Malvinder Singh and Shivinder Singh to pay Rs 1,170 crore each, as directed by the court earlier, in order to avoid being charged with contempt of court.

Earlier, the brothers appeared before the Supreme Court bench headed by Justice Deepak Gupta and informed that they haven’t been able to pay the amount as per the court’s directions. Malvinder Singh also stated that he wasn’t contesting the amount he is liable to pay, but only sought more time to make the payment.

It may be recalled that in December 2018, the Supreme Court had ordered maintenance of a status quo on Fortis’ deal with Malaysian healthcare group, IHH Healthcare Berhad.

However, Japanese drug maker Daiichi Sankyo—to which the Singh brothers owe Rs 3,500 crore after losing an arbitration over sale of Ranbaxy India Ltd—argued that certain transactions between IHH and Fortis had violated the Supreme Court’s directions.

In November 2019, Supreme Court bench headed by then Chief Justice Ranjan Gogoi had held the Singh brothers guilty of contempt for violating its order which had forbidden them from selling or diluting their shareholding in Fortis. The Supreme Court asked the Singh brothers to pay Rs 1,170 crore each, in order to avoid contempt of court.

Reiterating the same position, Justice Gupta said that the Supreme Court didn’t want to send the Singh brothers to jail if they could pay the amount as directed by it earlier.

Meanwhile, in a related development, the Supreme Court has also agreed to hear a plea by a minority shareholder of Fortis seeking implementation of IHH’s open offer in its takeover deal for the Indian hospital chain. Market regulator SEBI, too, has moved the Supreme Court supporting the implementation of IHH’s open offer.

The Supreme Court is scheduled to hear the case on March 16, 2020.