Exploring Legal Options To Address Supreme Court’s Contempt Notice: Fortis
A Fortis Healthcare India Ltd. Renkare dialysis clinic stands in New Delhi, India (Photographer: Prashanth Vishwanathan/Bloomberg)

Exploring Legal Options To Address Supreme Court’s Contempt Notice: Fortis

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Fortis Healthcare Ltd. said it is exploring legal means with respect to the Supreme Court judgment that found the company guilty of contempt for violating the court's earlier order.

The healthcare firm said it is exploring legal means to address the case in an expeditious manner. The SC on Friday held former Ranbaxy promoters Malvinder Singh and Shivinder Singh guilty of contempt of court for violating its earlier order, asking them not to divest their shares in Fortis Healthcare.

It has been advised that the open offer made by IHH Healthcare Berhad to the Fortis shareholders to acquire 26 percent stake at Rs 170 per share continues to remain in abeyance and would be adjudicated upon in conjunction with the hearing of the contempt petition, Fortis Healthcare said in a BSE filing.

"The Hon'ble Court has issued a suo moto notice of contempt to Fortis Healthcare Ltd for violating the Court order dated Dec. 14, 2018," it added.

The company is currently evaluating the judgement and exploring legal means to address it in an expeditious manner keeping in mind the best interest of all its stakeholders, Fortis Healthcare said. "The Hon'ble Court has vide the notice sought an enquiry into consummation of the acquisition of healthcare assets from RHT Health Trust by the company," it added.

The court has also sought an enquiry into whether the subscription by IHH to the shares of the company was undertaken after the status quo order was issued on Dec. 14, 2018 and accordingly, if such subscription was in violation of this status quo order, Fortis Healthcare said. "The company would be appropriately responding to these concerns of the Hon'ble Court by providing cogent evidence," it added.

The company will take this occasion to present facts before the Court that demonstrate that no part of the proceeds from the IHH transaction were paid to Malvinder Mohan Singh, Shivinder Mohan Singh or any of their controlled entities in anyway, Fortis Healthcare said.

The company would also present before the Supreme Court that the IHH transaction was consummated on Nov. 13, 2018 which was more than a month before the status quo order was passed and the same would be adduced before the court during the contempt proceedings, Fortis Healthcare said. It would also present that the IHH transaction was done through fresh preferential allotment of shares of the company and and due approvals were sought for the same through an extraordinary general meeting of shareholders held on Aug. 13, 2018, the firm said.

On the RHT transaction, which was consummated on Jan.15, 2019, Fortis said it was undertaken in the best interest of the company and at the time of consummation of the transaction, to the best of the its knowledge the erstwhile promoters or any of their controlled entities were not unit-holders in the RHT Health Trust," it added.

As a result of this transaction, Fortis bought back hospital properties worth around Rs 4,666 crore by acquiring securities in the RHT Trust's Indian entities that had ownership of these properties, the company said.

In an announcement to Bursa Malaysia, IHH Healthcare has also said that, it "remains committed to proceed with the Fortis open offer once the stay is lifted by the Supreme Court of India".

The next hearing date for this matter is Feb. 3, 2020. IHH is seeking appropriate legal advice on this matter and will subsequently decide on the future course of action, it added.

Also read: IHH’s Fortis Takeover Faces Fresh Legal Hurdle After Court Order

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