Shares of Fortis Healthcare crashed as much as 18.72 per cent to trade at Rs 252.95 in intraday deals after the Supreme Court refused to lift stay on IHH Healthcare’s open offer. In addition, the top court asked the Delhi HC to decide on the matter.
The stock hit a day’s low of Rs 250.40, down 19.54 per cent from its previous close of Rs 311.20.
Further, the SC ordered a Rs 5,000 penalty and a six-month jail term to Fortis’ erstwhile promoters, brothers Malvinder and Shivinder Singh, for contempt of court.
Malaysia’s IHH had acquired a 31 per cent controlling stake in Fortis Healthcare in 2018, which triggered an open offer to acquire another 26 per cent of Fortis shares from the market. It had acquired 31 per cent stake in Fortis Healthcare by paying $1.1 billion (around Rs 4,000 crore).
The open offer was stalled due to the ongoing legal proceedings, with respect to the transaction, based on a plea filed by Japanese drugmaker Daiichi Sankyo.
Daiichi had challenged the Fortis-IHH deal to recover the Rs 3,600 crore arbitration award it had won in a Singapore tribunal against the Singh brothers.
The Japanese drugmaker had moved a plea against the Singh brothers and Indiabulls alleging that they had pledged 1.7 million shares of Fortis Healthcare held by Fortis Healthcare Holding, despite India’s top court forbidding it.
Singapore’s arbitration tribunal ruled in favour of Daiichi in 2016. The tribunal found the Singh brothers guilty of making false claims in a self-assessment report of Ranbaxy when Daiichi bought their 34.82 per cent stake for around $2.4 billion.
Background
The Singh duo had sold Ranbaxy to Daiichi in 2008. Then, Sun Pharmaceuticals purchased Ranbaxy from Daiichi for $3.2 billion.
The case relates to the implementation of the arbitration award that the Singh brothers were ordered to pay to Daiichi in 2016. In 2019, Daiichi filed a contempt plea against the Singh brothers.
The Japanese drug maker had blamed the Singh brothers for allegedly suppressing facts during the sale of Ranbaxy. Daiichi also approached the top court to stop the Fortis-IHH deal. Following this, the SC stayed the Fortis-IHH open offer.
The two — Singh brothers — resigned as directors from the board of Fortis Healthcare in 2018.
Meanwhile, the domestic benchmark indices extended their fall for the second straight session on Thursday after the US Federal Reserve raised interest rates and forecast more hikes going further.