Fortis Healthcare on Tuesday sought 15-day extension to declare Q2 and Q3 earnings results. It said the auditor wouldn't be able to complete the auditing process before the stipulated board meeting. Earlier, the company claimed to release the quarterly results in its board meeting on February 13. In a regulatory filing, Fortis Healthcare said Tuesday's board meeting would consider the resignation of its promoters and Fortis founders Malvinder Mohan Singh and Shivinder Mohan Singh.
Fortis statement said that apart from paying Rs 65.98 lakh fine to stock exchanges for "non-submission of un-audited financial results", the reports emerging in the media had "enhanced the scope of limited review audit by the statutory auditors for the quarters ended September 30, 2017, and December 31, 2017." The company added: "We acknowledge and consider it just and equitable in the interest of governance and investors at large".
"While the normal audit process was going on smoothly, after the aforesaid news items, our interaction with auditors indicates that the audit process may not complete before the stipulated date of the board meeting," it said.
Market regulator Sebi on February 10 said it was probing the controversy surrounding group firms of Fortis Healthcare. The controversy pertains to a report published in Bloomberg last week that alleged regulatory lapses in the transfer of funds from Fortis Healthcare to some promoter-linked companies. "We are examining the Fortis issue," Sebi Chairman Ajay Tyagi told mediapersons on February 10, adding that "...we also received a reference on Religare from somewhere I can't disclose, and it will be looked into." Religare Enterprise, which is a diversified financial services group, and Fortis Healthcare have the same promoter groups.
Tyagi's statement came a day after media reports alleged that the Singh bothers took Rs 473 crore from their publiclly listed company, Fortis Healthcare, about a year ago without the board approval. The funds were mentioned as cash-and-cash equivalents in the company balance sheets but were allegedly routed to the Singh brothers. Refuting the allegations, Fortis said it deployed funds in secured short-term investments with companies in normal course of treasury operations. The company release to the regulator termed it "loan", claiming they were fully "secured", and being repaid.
The duo quit as directors from the company's board on February 8, days after the Delhi High Court order upheld the Rs 3,500 crore arbitral award in favour of Japanese drug maker Daiichi Sankyo. In a statement, the company said the resignation is "intended to free the organisation from any encumbrances that may be linked to the promoters in light of the recent HC judgement".
Earlier, it was also said that Fortis's auditor, Deloitte Haskins & Sells LLP, had refused to sign off the Q2 results until the funds were accounted for or returned, but Fortis Healthcare denied the allegations saying "the limited review process for Q2 and Q3 results is in progress".
Individually, Malvinder Mohan Singh and Shivinder Mohan Singh held 11,508 shares each in Fortis Healthcare Ltd as on December 31, 2017, out of total 51,86,17,631 shares of the company. Besides, the company has been caught up in several controversies surrounding its finances and court case involving arbitral award.