Mumbai: The blame game at Fortis Healthcare Ltd took a new turn with co-founder Shivinder Singh on Tuesday saying he had filed a lawsuit against older brother Malvinder Singh, alleging "oppression and mismanagement" at their joint businesses.
Last month, the brothers who are co-promoters of the Group had put the blame on former Religare Enterprises Chairman and Managing Director Sunil Godhwani for the group's troubles.
"The Group's troubles today stem from the Group's association with Sunil Godhwani who had started his association in Religare as its CEO in 2001," Malvinder Singh and Shivinder Singh said in a joint statement then.
On Tuesday, however, the blame also shifted on one brother accusing the other. Shivinder, who has decided to break business ties with his sibling, said the case, which also accuses former chief of financial services firm Religare Enterprises Sunil Godhwani, was filed in the National Company Law Tribunal, a quasi-judicial body for corporate governances.
The case comes in the wake of financial troubles at the group businesses RHC Holding, Religare Enterprises and hospital chain Fortis On Healthcare.
"The collective, ongoing, actions of Malvinder and Sunil Godhwani led to a systematic undermining of the interests of the companies and their shareholders," Singh said in a statement.
Last month the brothers had said in a statement, "Godhwani used his position to conceive and orchestrate a series of transactions over the better part of a decade that led to our Group's debt load by 2016. It is clear that he used our trust in him to exercise undue influence and has taken advantage of the faith bestowed by both families, the statement said.
"We are sure (Gurinder Singh) Dhillon and his family would have had a similar expectation from Godhwani regarding management of their resources," it added.
Gurinder Singh Dhillon is the spiritual guru of the Radha Soami Satsang Beas (RSSB).
On Tuesday, the company had said it would appoint an external agency to undertake scrutiny of its internal controls and compliances after an investigation found systemic lapses in funds allegedly taken out of it by erstwhile promoters Singh brothers.
The company had in February this year decided to carry out an independent investigation through an external legal firm following allegations of siphoning off nearly Rs 500 crore by the founding family through inter-corporate loans (ICDs).
"With respect to the other matters identified in the Investigation Report, the Board will appoint an external agency of repute to undertake a scrutiny of the internal controls and compliance framework in order to strengthen processes and build a robust governance framework," Fortis Healthcare said in its Annual Report for 2017-18.
The company further said, "Towards this end, they will also evaluate internal organisational structure and reporting lines, the delegation of powers of the Board or any committee thereof, the roles of authorised representatives and terms of reference of executive committees and their functional role."
The investigation report was submitted to the re-constituted board of the company on 8 June, 2018.
It found that the ICDs provided by the company's wholly-owned arm Fortis Hospitals Ltd to group firms of ex-promoters, billionaires Malvinder Singh and Shivinder Singh, "were not given under the normal treasury operations" and were not and specifically authorised by its board.
In the annual report, Fortis Healthcare further said, "We will also assess the additional requisite steps to be taken in relation to the significant matters identified in the investigation report, including inter alia, initiating an internal enquiry."
Stating that regulatory authorities are currently undertaking their own investigation, the healthcare chain said due to limitations on information available the external legal firm which conducted the investigation, at this juncture its board is unable to make a determination on whether a fraud has occurred in the company.
Addressing the shareholders, Fortis Healthcare Chairman Ravi Rajagopal said the new board is also "making a much more involved effort" in understanding the controls and process frameworks within the company.
"Our focus in the future will be on strengthening governance and transparency and restoring the health of the business," he said.
Fortis, which operates about 30 private hospitals in India, accepted an investment offer from Malaysia's IHH Healthcare Bhd in July, ending months of speculation over control of the company.
The two brothers, who now own less than 1 percent of Fortis, have denied allegations that they siphoned funds from the hospital operator.
The brothers also sold their controlling stake in drugmaker Ranbaxy Laboratories, founded by their family, to Japan's Daiichi Sankyo Co in 2008.
Last month, Fortis shareholders' approved the sale of their company to Malaysia’s IHH Healthcare with plans to immediately invest Rs 4,000 crore
--With agency inputs
Updated Date: Sep 05, 2018 07:32:51 IST