“I don't believe that the Board has taken a right decision in the best interests of shareholders,” said Pai.
Ranjan Pai, Chairman of Manipal Education and Medical Group (MEMG), said he is “very disappointed” with the Fortis board’s decision to back Munjal-Burmans offer.
MEMG owns Manipal Hospitals, which was among the five bidders in the fray to take control of Fortis Healthcare.
“I don't believe that the board has taken a right decision in the best interests of shareholders,” Pai said in an exclusive interview to Moneycontrol.
But Pai added that he isn’t pursuing Fortis anymore and he is not interested in exploring legal options.
“It's a battle between the shareholders and the board. I am not going to take any legal route,” Pai said.
Pai, along with TPG Capital, had announced a deal to buy Fortis Healthcare on March 27, leading to a bidding race with other interested parties - IHH Healthcare, Munjal-Burmans, KKR-backed Radiant Life Care and China’s Fosun.
Pai said the scenario may completely change on May 22 – when Fortis is holding the extraordinary general meeting (EGM) to vote on resolution moved by minority shareholders to remove four members on the Fortis Board - Brian W. Tempest, Harpal Singh, Sabina Vaisoha and Lt Gen. Tejinder S. Shergill.
Fortis minority shareholders East Bridge Capital and Jupiter India Fund in April had called for convening an EGM to remove the members on grounds that the Board failed to exercise its fiduciary duties towards all shareholders and has failed to maintain expected levels of corporate governance.
"I hope they get removed. They don't deserve to be on the board," Pai said, referring to the four directors.
The Fortis board on Thursday backed the offer proposed by the Munjal-Burmans for the healthcare chain’s hospital and diagnostics businesses.Sunil Munjal-led Hero Enterprise and Dabur's Anand Burman and Mohit Burman have jointly offered to invest Rs 1,800 crore in Fortis Healthcare, of which Rs 800 crore will be through a preferential allotment of equity shares at Rs 167 apiece. The remaining Rs 1,000 crore will be invested through a preferential issue of warrants, which would give them the right to buy more stake in the future at Rs 176 per share.