78 million us dollars out of Fortis !!; heres whats being said
Could it be that India’s tycoon Singh brothers took at least Rs 500 crore ($78 million) out of the publicly-traded hospital company Fortis they control without board approval about a year ago.
The funds were reported on the balance sheet of FortisBSE 17.09 % Healthcare Ltd. as cash and cash equivalents, but the money was routed and placed under the control of the Singhs at the time, according to the sources.
Fortis’s auditor, Deloitte Haskins & Sells LLP, refused to sign off on the company’s second-quarter results until the funds were accounted for or returned, the people said, asking not to be identified as the information is private.
It wasn’t immediately clear what the Singhs may have used the funds for. Fortis founders Malvinder Singh and his brother Shivinder have been working to pay back the money so the company can release its results, it was informed.
A spokesman for Fortis said the company loaned Rs 473 crore to “certain corporate bodies in normal course of treasury operations” as of July 2017, and in the third quarter of the current financial year those companies subsequently became part of the Singhs’ corporate group.
The loans have since been recognized as related party transactions and repayment has commenced, the spokesman said in an emailed statement.
Fortis announced Thursday that Malvinder Singh is resigning from his executive chairman role and Shivinder Singh is stepping down as vice chairman. The brothers cited a court judgment relating to the sale of a drugmaker they previously controlled.
India’s Companies Act requires board approval for related party transactions and when they exceed a prescribed size approval from shareholders is required. Those who authorize a related party transaction without the proper approvals can be punished under Indian law with up to a year in prison or a fine of as much as Rs 5,00,000.