Council assesses Sebi penalty of Rs 1 crore, says Fortis Healthcare

In response to market regulator Sebi’s May 18 order regarding the alleged embezzlement of funds by former Fortis Healthcare (FHL) promoters, the company said the board is currently evaluating the order in detail. , in consultation with legal advisers.

Fortis also noted that the order relates to Escorts Heart Institute and Research Center Limited (EHIRCL), a wholly owned subsidiary of FHL. “The management and board of directors of the newly incorporated company after NTK Ventures Pte Ltd. became a sponsor of the company are evaluating the order in detail, in consultation with their legal advisors,” Fortis said in a notice to the public. scholarships.

In the notification, Fortis further stated that a fine of Rs 1 crore has been imposed on EHIRCL for breach of certain provisions of the SEBI Act 1992 and the SEBI Regulations (Prohibition of Fraudulent and Unfair Trading Practices Relating to the Securities Market securities) of 2003.

However, Fortis added that Sebi pointed out that EHIRCL is currently under completely new management and that the revamped management has taken action against the old management for the fraud perpetrated under their watch.

According to PTI, Sebi imposed penalties totaling Rs 38.75 crore on 32 entities including Fortis Healthcare Holdings in a case related to misappropriation of funds from FHL and misrepresentation to cover up fraud.

This case dates back to 2018, when it appeared in the media that promoters of publicly listed FHL allegedly withdrew massive funds from the listed entity.

Deloitte Haskins & Sells LLP, FHL’s auditor, had refused to sign off on the company’s second quarter results until the funds had been posted.

An investigation into the case has been opened. The investigation looked at Intercompany Deposit Grants (ICDs) to three corporate borrowers – Best Healthcare Private Ltd, Fern Healthcare Private Limited and Modland Wears Private Limited – over the period from FY12 to FY18.

The regulator was reviewing possible breaches of the Fraudulent and Unfair Trading Practices Prohibition (PFUTP) provisions.

Sebi discovered that a systematic fraud scheme had been devised by the former promoters of FHL to channel the resources of a listed company through ICDs or short-term loans to various intermediary entities for the benefit of RHC Holding, an entity indirectly owned by the former promoters. from Fortis – Malvinder Singh and Shivinder Singh.

PTI reported that according to the May 18 order, funds totaling Rs 397 crore were diverted from FHL to RHC Holding through a network of entities. Sebi imposed a fine of Rs 5 crore each on Best, Fern and Midland.

In addition, it imposed a penalty of Rs 1 crore each on Fortis Healthcare Holdings, Fortis Global Healthcare, Escorts Heart Institute and Research Centre, RHC Finance, Shimal Healthcare, ANR Securities, Oscar Investments, Ligare Aviation (formerly Religare Aviation), Adept Lifespaces (formerly Adept Creations), Best Cure (new name Devera Developers), Rexcin Finance, Best Medicines (new name -Best Health Management), Artifice Properties, Ranchem, Addon Realty, AD Advertising, Rosestar Marketing, Torus Buildcon, Tiger Developers, Zolton Properties, Saubhagya Buildcon and Lowe Infra and Wellness, PTI said.

The regulator also fined Rs 25 lakh each on Preetinder Singh Joshi, Anurag Kalra, Jasbir Grewal, Tejinder Singh Shergil, Pradeep Raniga, Brian William Tempest and Harpal Singh. In addition, Sebi had imposed sanctions amounting to Rs 24 crore on 9 entities, including businessmen Malvinder Mohan Singh and Shivinder Mohan Singh, in connection with violations in the Fortis Healthcare case.

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