Fortis tumbles over 17% after SC continues stay on IHH open offer, pronounces 6-months jail term for Singh brothers

Fortis Healthcare's shares tumbled over 17 percent after the Supreme Court ordered the continuation of stay on IHH Healthcare's open offer and pronounced a six months jail term for Singh Brothers in the Daiichi-Ranbaxy case on Thursday.

At 10:57am, shares of Fortis Healthcare were trading at Rs 256, a decline of 17.5 percent from the previous close on the BSE.

The top court has also remanded the issue of the Fortis-IHH deal to Delhi High Court and directed it to consider a forensic auditor appointment for the deal.

"We understand that the proceedings before the Hon’ble Supreme Court have concluded with certain directions and the suo-motu contempt has been disposed off. We will go by the directions of the Hon’ble Supreme Court and will be seeking legal advice regarding our future course of action," said Fortis Heathcare in a statement as a reply to the order.

Malaysia’s IHH Healthcare acquired a 31 percent controlling stake in Fortis in August 2018 for $1.1 billion, triggering a mandatory open offer to acquire another 26 percent. The bidding process was overseen by an independent board.

In 2018 December, the Securities and Exchange Board of India (Sebi) approved IHH Healthcare to launch an open offer worth Rs 3,350 crore for shareholders of Fortis, asking them to tender their shares at Rs 170 apiece.

Later, Japanese pharmaceutical company Daiichi Sankyo challenged IHH's proposed acquisition of Fortis in an effort to hold the Fortis founders accountable for an arbitration award of Rs 3,600 crore ($500 million) resulting from a fraud claim. In December 2018, the Supreme Court halted the IHH-Fortis agreement.

Daiichi argued that former Fortis promoters Malvinder and Shivinder Singh had pledged 1.7 million shares of the firm in violation of the top court's orders.

Meanwhile, on September 13 this year, Ashutosh Raghuvanshi, MD and CEO of Fortis Healthcare, told CNBC-TV18, “IIH is absolutely committed to Fortis and India as a market and they have reportedly said that Fortis is going to be their main vehicle for expansion, so IIH is committed to Fortis and we are looking forward to having this legal thing behind us very soon.”