Fortis row: IHH Healthcare says it’s seeking legal advice after SC orders continuation of stay order

Malaysia’s IHH Healthcare, the largest shareholder in Fortis healthcare on Thursday said that it is seeking legal advice on the impact on the transaction after the the Supreme Court (SC) ordered the continuation of a stay on IHH Healthcare’s open offer for the company. The court ordered a forensic audit of the share sale in Fortis Healthcare Ltd. in 2018 and refused to allow the open offer from Malaysia’s IHH Healthcare Bhd to proceed, which led to a rout in Fortis’s stock.

In a Malaysian stock exchange filing on Thursday, IHH said that they have been advised by its Indian counsel to wait for the written judgment.

“The Board of Directors of IHH wishes to announce that, following the conclusion of hearing of the Suo Moto Contempt Petition No. 04 of 2019 (“Suo Moto Contempt Petition”) and the connected proceedings, i.e, Special Leave Petition (Civil) No. 20417 of 2017 (“SLP”) and the Contempt Petition (Civil) No. 2120 of 2018 (“Original Contempt Petition”) on 12 May 2021, the Honourable Supreme Court of India has pronounced the order and has read the operative part of its decision in Court”.

It further said that “IHH has been advised by its Indian Counsel to wait for the written judgment before announcing the decision of the Honourable Supreme Court of India. IHH is in the process of obtaining the written judgment from the Honourable Supreme Court of India and seeking legal advice on the impact thereof on the Transaction. Further announcements regarding the Fortis Open Offer and the Malar Open Offer will be issued after receipt of the copy of the said judgment,” it said.

The Group acquired a 31% controlling stake in Fortis in 2018, which triggered a mandatory open offer to acquire another 26% of Fortis shares from the market. The open offer has not proceeded due to ongoing legal proceedings due to the matter pending before the Supreme Court.

Between Fortis and IHH’s Global Hospitals and Continental Hospitals, the Group is a leading private healthcare operator in India with a network of more than 30 hospitals.

(With inputs from health)