Malvinder Singh: The Singh brothers may have taken new loans from Fortis to pay back hedge funds from the hospital chain, according to the company

NEW DELHI: In a new report on allegations, the Singh brothers have diverted nearly Rs500 crore from Fortis Healthcare, the group now suggests that former promoters repay part of this amount by taking out new loans through affiliates . inter-company deposits (ICD) through a network of intermediaries.

Fortis Healthcare noted on Saturday that two of its subsidiaries had advanced loans that were used to repay unsecured loans outstanding to companies owned by former promoters Malvinder and Shivinder Singh. External Auditor Deloitte Haskins & Sells raised red flags about these loans, stating that they were not pre-approved.

The first subsidiary, Escorts Heart Institute and Research (EHIRCL), advanced a loan to Fortis Healthstaff, which was used to repay Rs 7.95 crore to "a promoter group company". This loan was granted after EHIRCL acquired 71% stake in Fortis Healthstaff for Rs 3.46 lakh, he told the Stock Exchange.

The second subsidiary, Fortis Hospitals, made a loan to Fortis Emergency Services which was used to repay "an unsecured loan outstanding" to a promoter company. The loan was advanced the same day that Fortis Hospitals bought a stake in Fortis Emergency Services from the sponsoring company, he added.

"Some documents suggest that the repayment of the loan by Fortis Healthstaff Limited and other payments to the promoter company could have been channeled through various intermediary companies and used for repayment of the advance ICD / salesman at FHsL / company "Fortis The health care sector told the stock markets that it had autonomous financial results.

It is possible that the repayment of the loan by Fortis Emergency Services was ultimately channeled by the sponsoring company through intermediary companies for a similar repayment of DCI or advances from suppliers to Fortis, adds The report. He did not disclose the amount of the loan granted to Fortis Emergency Services, which part Fortis Hospitals bought from the promoter company and the amount paid at the time of the acquisition.

The identities of the promoter group companies involved in the two transactions are not clear either.

"With respect to the aforementioned acquisitions, we were informed that the prior approval of the Audit Committee had been obtained to acquire the interest, but not to advance the loans to these subsidiaries," said Deloitte Haskins. & Sells.

"In addition, we understand that all of the amounts paid for the acquisition of shares and loans made in the aforementioned transactions were significantly higher than the enterprise value of these companies at the time of the acquisition, as determined by the group "He added that he was not able to determine whether these transactions were detrimental to the group's interests.

In light of ongoing investigations by regulatory authorities on transactions, the Fortis Board of Directors stated that at this stage, it was not in a position to determine whether a fraud had occurred.

Fortis's latest revelation comes two weeks after revelations that its subsidiary has made B2B deposits, or unsecured loans, worth Rs 494 crore to three entities related to former promoters with no credit. 39, approval of the board of directors. After the refund, the unpaid amount from DAI rises to about Rs445 crore, Fortis told BSE on June 27th.

AND reported for the first time in editions dated June 13, June 27, and July 5 that business-to-business deposits were diverted from Fortis to three entities owned by the sponsor group – Fern Healthcare, Best Healthcare, and Modland Wears. Business-to-business deposits were also allocated to a third entity, Participation Finance, which had purchased loans from Religare, the financial services arm of the promoters, although this transaction was subsequently settled.

In the context of an investigation commissioned by the Fortis Audit and Risk Management Committee, the Company indicated that its management had reviewed certain information and documents relating to transactions made by Fortis. the company and "certain subsidiaries".

The figures reported in the unaudited results of Fortis on June 27 remain unchanged in the results audited, he said in a statement released Saturday. During the year ended March 31, 2018, Fortis had already recorded a net loss of Rs. 934 million, penalized by write-offs of the acquisition gap, B2B deposits and advances.

The company also stated that it was cooperating with the investigators and that it also requested more time from the Serious Fraud Investigation Office to submit the requested information.