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Supreme Court Pronounces Six-month Jail Term Upon Former Fortis Promoters

While giving judgment in a case of paramount importance, Supreme Court on Thursday gave a six-month jail term to Malvinder Singh and Shivinder Singh, who are the former promoters of Fortis Healthcare and hospitality services.

A bench headed by Chief Justice Uday Umesh Lalit awarded the jail term for violating norms in a case related to the sale of shares of Fortis to Malaysia-based IHH Healthcare.

The Singh brothers were dragged to the Apex court after Japanese firm, Daiichi Sankyo, had challenged the Fortis-IHH share deal to recover the Rs 3,600 crore arbitration award that it had won before a Singapore tribunal against them.

In its judgment, the Apex court also ordered the foreign promoters to deposit a fine of Rs 5,000 in the court. Japanese IHH Healthcare company had, in 2018, acquired a 31 per cent controlling stake in Fortis by paying $1.1 billion in a bidding process that was overseen by an independent board.

Singh brothers were sentenced after civil detention proceedings for failing to comply with the court’s orders to pay an arbitral amount to Daiichi. The top court had registered a ‘contempt of court case against them in 2019, asking why they should not be punished. After this verdict, the shares of Fortis Healthcare fell 15 per cent on the bourses.

The apex court had earlier referred the matter to the Delhi High Court while giving a stay order on the IHH open offer.

Anjani Kumar
Anjani Kumar
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