Two Fortis agreements involving Malvinder and Shivinder Singh under SFIO scanner
The agency under the Ministry of Corporate Affairs requested details of the two transactions from Fortis Healthcare. The deals are also reflected in an FIR recorded earlier this month by the Delhi Police’s Economic Offenses Wing (EOW) against the Singh brothers.
Fortis Healthcare had approached Delhi Police against the brothers who were its promoters until March 2018. They are currently behind bars and face an investigation by the EOW and the Enforcement Directorate into a loan fraud. multi-crore at
, another company they had promoted. They have previously denied the allegations of wrongdoing against them.
Fortis Healthcare claimed the Singh brothers had a stake in the real estate company but did not disclose this when its board of directors approved the acquisition. In addition, two of the three valuation reports of the assets held by the real estate company were not presented to the board. He alleged that part of the consideration for the transaction was used by the brothers to repay their loans.
In the second case, it is alleged that despite the failure of a private company to obtain a certificate of occupancy for a rented premises on Golf Course Road in Delhi, where Fortis Healthcare intended to open a new head office, Rs 47 crore which it had spent on the office has only reestablished.
Upon acquiring the real estate company, Fortis Healthcare alleged in the FIR that its subsidiary Fortis Hospitals had agreed to acquire the entire stake by paying Rs 77 crore for equity and Rs 123 crore in intercompany deposits.
The valuation of the real estate company was carried out by three different valuers. One of them valued the land and building at Rs 193 crore, while another proposed an enterprise value of Rs 237 crore for the land and building, assuming the land is to be sold in six to eight months.
The acquisition was approved by the board of directors of Fortis Healthcare in March 2014.
The cover-up of two assessment reports and the link to the Singh brothers was “done deliberately with bad faith intent and ulterior motives,” according to the EOW FIR.
In an internal investigation, the real estate company’s financial statements for 2013-14 showed that intercompany deposits received from Fortis hospitals were used to repay / replace existing secured and unsecured loans from Malvinder and Shivinder Singh, a- he declared.
A quote obtained from a real estate broker in 2020 for the property indicated a value of Rs 105 crore against Rs 200 crore according to the 2014 appraisal report, he said.
“It is clear that the Singh brothers acted in an attempt to earn excess money to repay the loans used” by them and the entities owned / controlled by them, according to the complaint.
“Through this transaction, the Singh brothers have caused unwarranted gain to themselves, people related to them and entities owned / controlled by them to the tune of Rs 42 crores and huge unwarranted loss” to Fortis Healthcare, he added.
In the other case, Fortis Healthcare said it had entered into a rental agreement in March 2014 with the private company for the establishment of a new head office on Golf Course Road.
Under the terms of the rental agreement, he paid Rs 22 crore, or the equivalent of six months’ rent, to the company as a security deposit. Fortis Healthcare would also have covered other expenses.
However, the private company was unable to obtain the certificate of occupancy of the premises and the lease was therefore terminated in December 2016.
The company alleged that two letters of intent were executed in March and September 2017, extending the deadline for repayment of the money. However, “no amount was recovered” until September 2018.
“The documents and facts of the transaction indicate that undue extensions were granted” to the private company “at the request of the Singh brothers and until the Singh brothers control the complaining company, no effective efforts were made. made to recover the excess security deposit. Therefore, in fiscal year 2018, a provision was made to designate the total amount of Rs 22 crore as potential non-recovery, “according to the EOW FIR.
Apparently, the Singh brothers “deliberately with dishonest intent” have continued to grant extensions to the private company over and over again, he said.