IHH to cooperate with Fortis audit, stands by its 31% stake purchase

It is confident an independent review will back its 2018 investment.

IHH Healthcare said it will fully cooperate with a forensic audit of Fortis Healthcare after India's Supreme Court on 25 September disposed of Fortis' special leave petition challenging a Delhi High Court order requiring the audit.

The petition also challenged certain observations the High Court made about the company.

IHH said it is confident an independent review will establish that its 2018 investment was transparent and properly approved.

Its subsidiary, Northern TK Venture, bought its stake through a competitive bidding process, taking 31% of Fortis via a preferential allotment of newly issued shares, followed by a mandatory tender offer to public shareholders.

IHH said it acquired no secondary shares from the former promoters, Malvinder Mohan Singh and Shivinder Mohan Singh, and made no payments to them.

The brothers resigned from the Fortis board in March 2018, and IHH invested in November 2018. The company said it had no interaction with them.

The deal won all corporate, shareholder and regulatory approvals, including from the Competition Commission of India and under SEBI takeover rules, IHH said.

It added that several other bidders took part, and that Fortis was overseen at the time by a reconstituted three-member independent board appointed by activist minority investors.

IHH added that it was not a party to the dispute or execution proceedings between Daiichi Sankyo and its judgment debtors.

The group said it nonetheless suffered losses from delays in obtaining the tender offer approvals.