Companies

Fortis directors ask shareholders to take ‘informed’ decision on voting-out resolution

Amiti Sen New Delhi | Updated on May 10, 2018

The directors, Brian Tempest, Harpal Singh, Sabina Vaisoha and Tejinder Singh Shergill, through extensive explanations, tried to refute allegations that they had not satisfactorily exercised their respective fiduciary duties towards all shareholders and had failed to maintain the expected levels of corporate governance.

Letter to shareholders written ahead of expert panel, board of directors’ meeting on May 10

Four directors in the board of Fortis Healthcare, whose removal was sought by two minority shareholders of the company last month, have written to all shareholders asking them to take an "informed decision" while voting on the matter.

The directors, Brian Tempest, Harpal Singh, Sabina Vaisoha and Tejinder Singh Shergill, through extensive explanations, tried to refute allegations that they had not satisfactorily exercised their respective fiduciary duties towards all shareholders and had failed to maintain the expected levels of corporate governance.

"Through this note, we would like you to evaluate some of the key decisions taken by the board which should be considered while forming a view about the board and its functioning with regard to its fiduciary duties," the letter to shareholders stated.

The letter to shareholders has been written ahead of the crucial expert panel and board of directors’ meeting on May 10 to decide on the binding bids that have come in for Fortis. The extra-ordinary general meeting (EGM) to decide on the date of the directors is on May 22.

National Westminster Bank Plc as a trustee of Jupiter India Fund, East Bridge Capital Master Fund Ltd and East Bridge Capital Master Fund I Ltd had requested for the EGM to vote on the removal of the directors.

The letter from the directors went ahead to explain the steps taken by the board during investigations by SEBI against the company and former promoters Malvinder Singh and Shivinder Singh. Further, the note gave the logic behind the decision of the board of directors to evaluate only binding bids made for the company.

"The non-binding bids involve considerable uncertainty and merely running a due diligence process does not guarantee a binding bid which the board had wanted in the best interest of the company," the note said.

The note also explained in details the process undertaken to fill the recent vacancies in the board of directors.

"As members of the current board and keeping in mind our fiduciary duties, we think it is imperative that the company does not lose any more time and consider the offers in hand as adequate and substantive. At the same time, we want to ensure transparency and independence in decision-making. Thus, we have formed an independent expert advisory committee to advise the board...," it added.

A complete change of the entire board at this time will certainly add more turbulence and ambiguity for the company as well as the management, the note added.

The binding bids to be evaluated include the ones from Manipal-TPG, IHH Berhad, Munjal-Burman duo and KKR backed Radiant Life Care.

Published on May 09, 2018

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