Fortis Healthcare on Wednesday said it had found “systemic lapses” in certain loans given to companies connected to its former promoters, the Singh brothers, PTI reported. The company said it will initiate legal action for the recovery of the loans.
The company made provisions of around Rs 580 crore for the loans in its January-March earnings results, but said their “recoverability is doubtful”.
The company had set up an investigation in February through an external legal firm, after it said that Fortis Hospitals deployed around Rs 473 crore as secured short-term investments to group firms linked with the Singh brothers. It had submitted the findings of the investigation to the Securities and Exchange Board of India and Serious Fraud Investigation Office.
Fortis said its report had revealed that the payments were “not specifically authorised” by its board, and that there was evidence they had been used to repay loans made by companies connected with the Singhs, reported Financial Times. The companies did not repay the loans after the Singh brothers bought them later.
Malvinder Singh, the former executive chairman, denied any wrongdoing in his written responses, the company said.
Malvinder Singh and Shivinder Singh now control less than 1% stake in Fortis Healthcare.