Brian Tempest poses in a research lab in Gurgaon, India. (Photographer: Amit Bhargava/Bloomberg)

Fortis Shareholders Vote Out Last Of The Old Board Members Amid Takeover Battle

Fortis Healthcare Ltd.’s shareholders voted in favour of resolutions to remove Brian Tempest, the last of the four old directors, and appoint three new board members in what may have a bearing on who takes control of India’s second-largest hospital chain.

About 58 percent of the total shareholders supported the resolution to remove Tempest, according to the hospital chain’s exchange filing. More than 65 percent voted in favour of the resolution to appoint Suvalaxmi Chakraborty, Ravi Rajagopal, and Indrajit Banerjee as independent directors.

Voting Outcome

  • Shareholders representing 65.9 percent of the total stake in the company voted at the EGM.
  • Of those who voted: 99.82 percent supported appointment of Chakraborty, Rajagopal, and Banerjee; 87.91 percent backed the resolution to remove Tempest.

“This is not just a vote for the appointment of directors, but also against the process that's been followed by the board dominated by the old directors,” Amit Tandon, managing director of corporate governance and proxy advisory firm IiAS, told BloombergQuint. “It’s a vote against the process that’s been followed, as well as the decision to go with the Munjal-Burman offer [for the hospital chain].”

Also Read: SEBI Probes Insider Trading Violation, Other Regulatory Lapses

Two institutional investors — East Bridge Capital Fund and Jupiter India Fund that own 12.04 percent in the company — had called the extraordinary general meeting yesterday to vote on seven resolutions, including removal of Tempest and appointing the three new directors. The remaining sought ouster of directors Harpal Singh, Sabina Vaisoha and Tejinder Singh Shergill. They, however, quit before the shareholders voted.

All the four had voted in favour of the offer by Sunil Munjal’s Hero Enterprises Investment Office and the Burman family office. The other suitors include TPG-backed Manipal Health Enterprises Ltd., Malaysia’s IHH Healthcare Berhad, Radiant Life Care Pvt. Ltd. and the Fosun Group. Fortis Healthcare has been a takeover target ever since founders Malvinder Singh and Shivinder Singh lost control following allegations of siphoning funds.

Also read: IHH Healthcare Extends Acceptance Period Of Revised Offer For Fortis