Fortis shares tank 20% as Supreme Court extends stay on IHH open offer
The Supreme Court also remanded the issue of the Fortis-IHH deal to the Delhi High Court
Shares of Fortis Healthcare tanked nearly 20% on the BSE in Thursday's trading session after the Supreme Court (SC) ordered the continuation of a stay on IHH Healthcare's open offer for the company.
The court ordered a forensic audit of the share sale in Fortis Healthcare Ltd. in 2018 and refused to allow the open offer from Malaysia's IHH Healthcare Bhd to proceed, triggering a rout in Fortis's stock.
The Supreme Court also remanded the issue of the Fortis-IHH deal to the Delhi High Court which will decide on whether the open offer for Fortis can be allowed based on the evidence it gets and directed it to consider a forensic auditor's appointment.
Daiichi is seeking execution of $500 million award against hospital chain's former owners, the Singh brothers, in Delhi High Court.
The verdict delays the takeover of the embattled hospital chain company by Malaysia's IHH that has been pending for over three years.
IHH had won a bid for a 31% stake in Fortis in 2018, which triggered an open offer for another 26% as per Indian regulations.
A ruling by three judge-panel, headed by Chief Justice U.U. Lalit on Thursday also sentenced former owners of Fortis Healthcare, Malvinder Singh and Shivinder Singh, to six months in jail.
The court sought a probe into sale of shares in Fortis by lenders and transfer of money to RHT Health Trust on a petition filed by Japanese drug maker, Daiichi Sankyo Co., which had acquired a pharmaceutical firm from the Singh brothers in 2008, as per Bloomberg.
The Supreme Court had blocked the open offer based on a plea filed by Japanese drugmaker Daiichi Sankyo, who tried to enforce an arbitration award it won in a Singapore tribunal on a fraud claim against Fortis' founder brothers Malvinder Singh and Shivinder Singh.