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Fortis Healthcare funds diversion case: SEBI bans Shivinder and Malvinder Singh from markets

BL Mumbai Bureau | Updated on: Apr 20, 2022
Malvinder Mohan Singh (right) and Shivinder Mohan Singh

Malvinder Mohan Singh (right) and Shivinder Mohan Singh

Observes Singh brothers siphoned off money through layers of transactions between January and May 2016

SEBI has banned Shivinder Singh and Malvinder Singh, the former promoters of Fortis Group, for three years or until they repay over ₹400 crore to Fortis Healthcare (FHL) with interest. SEBI had directed the Fortis Healthcare audit committee to regularly monitor the progress of such measures being taken by the company and report the same to the board. RHC Holding, Malav Holdings, Shivi Holdings, Gagandeep Singh Bedi and Bhavdeep Singh, have been barred from the markets and being associated with any listed company. SEBI has also imposed monetary fines on them.  

SEBI had observed that the Singh brothers had siphoned off money from the company through various layers of transactions and under the garb of investment through inter-corporate deposits (ICDs) between January and May 2016.

SEBI had found that the Singh brothers took more than ₹400 crore out of the FHL group. Fortis group had granted loans to three companies through ICDs. These companies, connected to the Singh brothers, were examined by a forensic auditor. FHL and other group companies issued several short-term loans to benefit promoters where the loans were repaid by channelling the funds through various companies.

It was observed that the ultimate beneficiary of these loan was RHC Holding, a company promoted by the Singh brothers. A similar pattern was seen with loans to various other unrelated entities that benefited RHC holding. Ventures Pte Ltd, a wholly-owned subsidiary of IHH Healthcare Berhad, is now the promoter of Fortis.

SEBI also found that ₹576 crore was transferred from Fortis to RHC Holding (through Best Healthcare, Fern Healthcare and Modland Healthcare) on December 28, 2011. RHC Holding utilised this money for more than three  years, and FHL made no such disclosure in its financial statements during the concerned FYs. F

Published on April 19, 2022
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