Fortis Healthcare’s four directors, whose removal has been sought by two institutional shareholders, have denied allegations that they failed to maintain corporate governance and fairly represent interests of all shareholders.
In a joint representation to shareholders, Brian W Tempest, Harpal Singh, Sabina Vaisoha and Tejinder S Shergill said the board had decided to consider only binding bids for Fortis, considering the immediate financing needs of the company.
National Westminster Bank Plc as trustee of Jupiter India Fund and East Bridge Capital Master Fund, which together hold 12.04 per cent stake in Fortis Healthcare, have demanded that the matter of removal of these directors from the company’s board be taken up at the company’s EGM on May 22.
In their letter to the shareholders, the directors said the board decided to consider only binding bids as “the non-binding bids involve considerable uncertainty and merely running a due diligence process does not guarantee a binding bid, which the board had wanted in the best interest of the company”.
They added: “Given that there are four binding offers for consideration as on date and considering the need for a certain and quick solution for the company, it was considered prudent that only binding bids should be considered.”
Manipal-TPG, Munjals-Burmans, IHH Healthcare and KKR-backed Radiant Life Care have given binding offers to acquire Fortis. The company’s board will decide the winning bid on May 10.
They directors said that in the last 18 months, Fortis has been trying to close a possible transaction and has seen interest from both financial and strategic players.
Stating that significant amount of time and effort of the management has been spent with the potential investors, they said the board “wished to end this seemingly unending process in the best interest of the company and therefore decided to evaluate only the binding bids…”
The four board members further said their decision was also supported by the new additional board members, who were suggested by the two institutional shareholders.
Refuting allegations of not exercising their fiduciary duties, the board members said after media reports came out, and before the formal institution of an investigation by SEBI and other regulatory bodies, the audit committee of the board, initiated an independent enquiry by Luthra & Luthra Law Offices.