Fortis-Singh brothers controversy: Sebi asks stakeholders to continue efforts to recover money

Sebi Tuesday directed Fortis Healthcare Ltd (FHL) and Fortis Hospitals Ltd (FHsL) to continue efforts to recover more than Rs 403 crore from Shivinder Mohan Singh and Malvinder Mohan Singh as well as seven other entities. The latest ruling confirms the watchdog's interim order where it had found that Singh brothers along with seven entities diverted Rs 403 crore from FHL, for the ultimate benefit of parent company -- RHC Holding Pvt Ltd -- and group company Religare Finvest Ltd.

Fortis Healthcare in February had asked markets regulator Sebi to initiate legal proceedings, including the arrest of its former promoters Singh brothers for the same case. Fortis Healthcare had also asked the Securities and Exchange Board of India (Sebi) for a personal hearing on the matter.

Commenting on the development, Fortis Healthcare Ltd Chairman Ravi Rajagopal said: "Once SEBI order was received in Oct 2018, then the revised version in Dec 2018, we began legal proceedings to recover the money as per the directive in the order. All the nine parties/noticees were sent notices from FHL."

Worth noting, Fortis Healthcare on Tuesday appointed Ashutosh Raghuvanshi as Managing Director and Chief Executive Officer of the company with immediate effect. The company's board of directors have approved the appointment of Raghuvanshi as MD and CEO with immediate effect for a period of three years, Fortis Healthcare said in a filing to the BSE.

Singh brothers, erstwhile promoters of FHL, have also been asked not to associate themselves with the affairs of FHL and FHsL in any manner. RHC Holding, Shivi Holdings Pvt Ltd, Malav Holdings Pvt Ltd, Religare Finvest, Best Healthcare Pvt Ltd, Fern Healthcare and Modland Wears Pvt Ltd are the seven entities.

According to the regulator, the entities have failed to effectively rebut the prima facie findings and the allegations made against them in the interim order. The detailed investigation in the matter is still in progress which is supposed to reveal all the layers of the alleged fraud as well as expose the specific role of each entity, it noted.

Pending investigation, Singh brothers and the six entities have also been directed not to dispose of any of their assets or divert any funds without Sebi's prior permission. For Religare Finvest, the regulator said the firm should not dispose of or alienate any of its assets or divert any funds except for complying with a corrective action plan as stipulated by the Reserve Bank of India.