Singh brothers accused of taking out millions from Fortis

 

On February 9, 2018, both the Singh brothers, Malvinder and Shivinder Singh, resigned from their respective posts as executive chairman and vice chairman. They justified their resignation saying that it will be beneficial for the organisation.

The action which led to their resignation was that they were accused of taking approximately Rs. 4500 crores, about a year ago from the publicly traded hospital company they control., without the approval from the board. Though it was not clear as to how the funds were used.

The record of the accounts was reported on the Fortis Health Care Ltd. balance sheet, both in terms of cash and cash equivalents. Auditor of Fortis, Deloitte Haskins and Sells LLP have denied signing of the company’s second-quarter results until the money is accounted for or returned. But after the Singh brothers resigned, India’s second largest hospital chain Fortis announced that it would report the second and third quarter results on February 13 and will also report the cash and cash equivalents of Rs. 5.4 billion as of March 31.

As reported by the Economic Times, the company’s spokesperson said that Rs. 473 crores were loaned in July 2017. The companies taking loan were automatically considered a part  of the corporate group, thus their loans are expected to be repaid.

These rising legal and financial problems compelled the Singh brothers to back out. They are now trying to sell major chunks of their company, in order to bring about parity in their business.

Sources

Economic Times, NDTV