Four years after Malaysia’s IHH Healthcare Berhad won the bid for the Fortis Healthcare network of hospitals, the chapter is far from closed.

Uncertainties outlined by the IHH Healthcare’s then Managing Director and Chief Executive Dr Tan See Leng to businessline, continue to cast a shadow over the ₹4,000 crore deal to bring the Fortis hospital chain into its fold. With old ghosts continuing to haunt the deal, the legal overhang does not augur well for healthcare or investments in India, say healthcare professionals, familiar with the workings of Fortis, IHH and the erstwhile promoter family’s Singh brothers (Malvinder and Shivinder).

The Supreme Court had, Thursday, ordered the stay to continue on the IHH open offer for Fortis, even as it directed the Delhi High Court to look into the issue and consider a forensic audit of the deal, according to reports.

In 2018, when IHH had won the bid for Fortis, Dr Tan had pointed to challenges, including ongoing probes against the previous management of the hospital. And those challenges continue to cast their long shadow on the transaction. Dr Tan was, however, optimistic on healthcare as a long-term investment, and had indicated that the journey had only just begun.

But that journey seems to be hitting speedbreakers that trace back to the former Fortis promoter family.

Seeking damages

IHH had won the bid for Fortis in a long-fought battle with multiple bidders. Having got 31 percent stake in Fortis, IHH had to go in for an open offer for another 26 per cent. But the deal was challenged by the Japanese drugmaker Daiichi Sankyo – as an offshoot of another ongoing legal battle with the Singh brothers. Daiichi had bought drugmaker Ranbaxy, a deal that went sour. Daiichi Sankyo later sought ₹3,500 crore as damages from the Singh brothers (who were then promoters of Fortis as well).

Distancing itself

Even as this saga plays out, Fortis under IHH has been distancing itself from the alleged misdoings of the promoters – by bringing in a new team and looking to rebrand itself as Parkway, a hospital brand owned by IHH.

In the meanwhile, it has been revolving doors at the top for IHH-India, presently seeing its third Chief Executive in four years. As the case now goes to a lower court, healthcare professionals are hopeful that IHH has the patience to see it through, as India is among its key markets after Malaysia, Singapore and Turkey.