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Proxy advisory SES has raised red flag in governance and disclosure at listed hospital firm Healthcare Global Enterprises (HCG) and the amalgamation of its wholly-owned subsidiary HCG Pinnacle Oncology Pvt Ltd.
Stakeholders Empowerment Services (SES) has asked minority shareholders of HCG to vote against the resolution as the company has made inadequate disclosures regarding the amalgamation. It did not, however, question the justification for the proposed merger.
SES said the cancer hospital operator has been “economical with the truth.”
“Earlier, the (target) company had only been a 51 per cent subsidiary and if the merger was to happen it would have to go through the Tribunal route. Therefore, SES is of the opinion that to avoid the Tribunal route, HCG has carried out the transaction in two steps (by first buying up the remaining stake and then effecting an amalgamation.),” SES added.
When contacted, a spokesperson for HCG told BusinessLine : “HCG Pinnacle Oncology Pvt Ltd is a 100 per cent wholly-owned subsidiary of the company (HCG) and the amalgamation is well in compliance with all stated rules, regulations and also meets all governance standards.”
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