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Daiichi had approached court on Thursday to stall the deal until it was paid a Rs3,500 crore arbitration award by Fortis’ erstwhile promoters Malvinder and Shivinder Singh. The matter will be heard next on April 25.
Justice Jayant Nath asked RHC Holding Pvt Ltd and Oscar Investments Ltd, companies controlled by the Singhs, to explain how they arrived at the realisable value of unencumbered assets disclosed to court on March 14, 2017. He also directed them to disclose unencumbered shareholding in Fortis Healthcare on that date.
RHC and Oscar hold shares in Fortis through a company called Fortis Healthcare Holding Pvt Ltd (FHHPL).
Fortis Healthcare has now been included in the latest proceedings after its counsel, P Chidambaram, argued it had not been made a party to Daiichi’s application to stay the healthcare group’s deal. He added that the sale would not be concluded any time soon, as Fortis would require several regulatory approvals before a sale could occur.
The Rs 3,900 crore Fortis-Manipal deal was approved on March 27 and involves Fortis hiving off its hospital business and merging it with Manipal Health in the first phase.
“We’re still in talks…My talks cannot be stultified at this point,” said Chidambaram, adding that FHHPL’s stake in Fortis has dropped to 0.67% now from 52% last year.
As much as 99% of Fortis shares are held by banks and other shareholders, he added.
Arvind Nigam, counsel for Daiichi, argued the sale should not be allowed until the respondents can furnish the amount they disclosed as part of RHC and Oscar’s unencumbered assets in March 2017.
The two companies had together disclosed a value that made up nearly two-thirds of the award and this value was primarily derived from FHHPL’s shareholding in Fortis Healthcare, he told court.
“The value of unencumbered assets primarily flows from Fortis Healthcare Holdings, which flows from Fortis Healthcare Limited,” Nigam argued.
ET is awaiting a response from Fortis Healthcare.
The Singhs, currently in Singapore to appeal the award, now hold less than 1% in Fortis Healthcare, down from 34.43% in December 2017 as most of their shares in the companies were pledged.
On Wednesday, the brothers alleged that Daiichi’s “constant” blocking of “any economically accretive proposals” showed that its motive was not to secure the award, but to be “vindictive” and hurt larger stakeholders in Fortis. “Their repeated actions have negatively impacted Indian banks, all our shareholders and employees,” the Singhs told ET.
The appeal in Singapore will be heard between April 9 and 13.