SEBI directs Singh brothers, 8 other entities to repay over Rs 403 cr to Fortis Healthcare

Finding illegal diversion of funds from the company, markets regulator Sebi on Wednesday directed Shivinder Mohan Singh, Malvinder Mohan Singh and eight other entities to repay Rs 403 crore along with interest to Fortis Healthcare.

The Singh brothers are former promoters of Fortis Healthcare.

All the entities have prima facie acted in a fraudulent manner in diverting funds around Rs 403 crore from Fortis Healthcare Ltd (FHL), a listed company, for the ultimate benefit of parent company -- RHC Holding Pvt Ltd -- and group company -- Religare Finvest Ltd -- violating the securities laws, Sebi said.

In a 21-page interim order, the watchdog said that prima facie role of FHL and Fortis Hospitals Ltd (FHsL) in the alleged diversion of funds through conduit entities has been established.

Apart from the Singh brothers, FHsL, RHC and Religare Finvest, the other entities that have been asked to repay the money are Shivi Holdings Pvt Ltd, Malav Holdings Pvt Ltd, Best Healthcare Pvt Ltd, Fern Healthcare Pvt Ltd and Modland Wears Pvt Ltd. The money along with due interest has to be paid within three months to FHL.

Pending completion of investigation and till further order, the Singh brothers and the eight entities have also been directed not to dispose of any of their assets or divert any funds without prior permission of Sebi. However, they can utilise funds for certain purposes, including for meeting expenses of day-to-day business operations, the order said.

“The prime facie role of FHL and FHsL in the alleged diversion of funds through the conduit entities (viz. Best, Fern and Modland) to RHC Holding and Religare Finvest Limited for the ultimate benefit of Shivi Holdings Private Limited, Malav Holdings Pvt Ltd., Shivinder Mohan Singh and Malvinder Mohan Singh has already been established,” the regulator said, citing a forensic audit report.

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