Fortis Forensic Audit

Supreme Court Upholds Fortis Forensic Audit in Ongoing Daiichi Dispute

The Supreme Court declined to block a Delhi High Court-ordered forensic audit of Fortis Healthcare transactions as Daiichi Sankyo seeks to enforce a ₹3,500 crore 2016 arbitral award against former Fortis promoters Malvinder and Shivinder Singh, arising from Daiichi’s acquisition of Ranbaxy. The audit will examine the decline in the brothers’ Fortis shareholding and related transactions, including Fortis’s deal with Malaysia’s IHH Healthcare, to trace assets that may be available to satisfy the award. The court said the High Court’s observations about Fortis were tentative and directed that they must not influence the auditor or its findings. Fortis says it was not party to the arbitration or a judgment debtor, is not liable for its former promoters’ share transfers, lacked authority to prevent transfers of dematerialized shares, and received no proceeds when their stake declined. The court also questioned whether Fortis management knew of orders affecting the brothers’ shareholding and whether its conduct warranted scrutiny.

Key Points

Topics