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Our Bureau

New Delhi , Sept. 30

THE Delhi High Court on Friday ordered Escorts Ltd and seven others to maintain status quo regarding the sale of Escorts Heart Institute and Research Centre (EHIRC) till November 22.

Acting on a petition filed by Mr Anil Nanda, Chairman & MD of Goetze India, and younger brother of Escorts Ltd Chairman Mr Rajan Nanda, that challenged the conversion of EHIRC from a charitable institution to a company/non-charitable entity, the Court ordered status quo till November 22, the next date of hearing, agency reports said.

In his petition, Mr Anil Nanda had questioned the manner in which EHIRC was converted from a charitable trust to a company.

The court also issued notices to Escorts Ltd, EHIRC, Ms Ritu Nanda, Mr Rajan Nanda, Mr G.B. Mathur, Registrar of Firms and Societies Chandigarh, the Registrar of Companies Jalandhar and the Registrar of Societies Delhi, said the agency reports. The court asked all of them to file their replies by November 22.

It could, however, not be ascertained whether Escorts was planning to appeal against the order.

The board of Escorts had cleared the sale of EHIRC on Wednesday to Fortis Healthcare, for a sum of Rs 585 crore. Fortis had also taken over the Rs 75-crore debt of EHIRC.

Management already with Fortis?: However, industry sources pointed out that the transaction between Escorts and Fortis has already been completed, and the shares and management of the heart institute are already with Fortis.

"The shares have been transferred and most of the money too would have been transferred," Mr Harpal Singh, Chairman, Fortis, said. On the legal issues, Mr Singh said, "that has been part of the past and Fortis is not involved in it. We will abide by whatever decision the court takes."

It is learnt that Escorts has already charted out a strategy to use the funds derived from the sale to restructure its high cost debt, estimated at about Rs 1,000 crore, and utilise it to increase productivity at its tractor unit.

Under DDA scanner: Apart from Mr Anil Nanda's objections on the legality of the conversion of the trust, the transaction has also come under scrutiny of the Delhi Development Authority (DDA). The lease conditions for land allotment to charitable hospitals by the DDA prohibit sale.

Meanwhile, credit rating agency ICRA on Friday said it would take a rating decision on Escorts Ltd, which hitherto has been assigned default rating, after watching the developments, including legal issues regarding sale of Escorts Heart Institute by it.

"ICRA is watching these developments closely and would take a rating decision as more clarity is obtained on the certainty and timing of these cash flows," the rating agency said in a release here.

Escorts Ltd's scrip closed at Rs 101.75 on Friday, on the Bombay Stock Exchange, down 0.93 per cent compared to the previous day's closing price.

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