Fortis Challenges Forensic Audit Order in Supreme Court

Fortis Healthcare has lodged a special leave petition with the Supreme Court, challenging a Delhi High Court order that mandated a forensic audit. This audit is intended to scrutinize alleged asset erosion by its former promoters, Malvinder and Shivinder Singh.

The High Court's directive stems from enforcement proceedings initiated by Japanese drugmaker Daiichi Sankyo, seeking to recover an arbitral award. Initially valued at Rs 2,562 crore in 2016, the outstanding amount, with accrued interest, has reportedly climbed to approximately Rs 5,300 crore.

The court's concern arises from the progressive diminishing of assets that were originally available to satisfy the award, a situation observed over nearly a decade since execution proceedings began. The forensic audit will extend beyond the former promoters to include banks, financial institutions, and specific transactions involving Fortis and RHT Health Trust.

Transactions under scrutiny include the November 2018 acquisition of a 31.1% stake in Fortis by IHH Healthcare Berhad-Northern TK Venture for about Rs 4,000 crore, and Fortis's subsequent payment of approximately Rs 4,666 crore to acquire interests in assets held by RHT Health Trust.

The audit specifically aims to examine the dramatic reduction in the Singh brothers' shareholding in Fortis and investigate claims regarding the disposal of shares after assurances were given to the court, along with explanations from lenders and financial institutions regarding encumbered shares.