Market regulator SEBI issued a show cause notice to Escorts Heart Institute and Research Center Limited (EHIRCL), a wholly-owned subsidiary of Fortis Healthcare. This notice is regarding the alleged diversion of funds from Fortis Healthcare by its former promoters.
The company informed the exchange, “In the matter relating to the alleged diversion of funds from the Company by its erstwhile promoters, SEBI has issued a show cause notice to EHIRCL under Rule 4 of SEBI (Procedure for holding inquiry and imposing penalties) Rules, 1995 read with Section 15-I, Section 15HA and Section 15HB of Securities and Exchange Board of India Act, 1992.”
EHIRCL received the notice from the regulator on April 15. “The management and Board of the Company that was newly constituted after NTK Ventures Pte. Ltd. (a wholly-owned subsidiary of IHH Healthcare Berhad) became promoters of the Company, are evaluating the notice received by EHIRCL, in consultation with its legal advisors," the company stated.
This is part of the ongoing investigation which was initiated in 2018. It was alleged that Fortis Healthcare’s then promoters Malvinder Mohan Singh and Shivinder Mohan Singh took USD 78 million (about Rs 500 crore) out of the publicly traded entity they controlled without board approval in 2017.