More skeletons in the Fortis closet, as Singh bros claim ownership of Fortis brands

Malvinder Singh, Chairman of Fortis, speaks during a news conference in New Delhi July 26, 2010. Malaysian state investor Khazanah trumped India's Fortis Healthcare in a takeover battle for Singapore's Parkway with an offer that values Asia's biggest listed hospital operator at $3.3 billion. REUTERS/B Mathur (INDIA - Tags: BUSINESS HEALTH) - GM1E67Q1FD701

Fortis Healthcare Wednesday said it has received notices from companies of erstwhile promoters Singh brothers claiming ownership of brands such as Fortis, SRL, and La Femme, and over Rs 250 crore in dues.

The company got four notices, of which two were on May 30 and June 1 claiming Rs 18 crore from Fortis, and two others on June 4 demanding Rs 215.82 crore and Rs 19.62 crore, respectively.

“Based on the advice of external legal counsel, the company believes that the claims are without legal basis and are not tenable and accordingly no adjustment has been made in these financial results with respect to these claims,” Fortis said in a statement.

The claimants representing Singh brothers have also filed a civil suit before the District Court, Delhi in February 2018 against various entities including the company and have claimed ownership of brands Fortis, SRL and La Femme in addition to certain financial claims.

The District Court passed an ex-parte order directing that any transaction undertaken by defendants, in favor of any other party, affecting the interest of the claimant shall be subject to orders passed in the said suit.

Fortis clarified the brands are owned by a company related to erstwhile promoters Singh brothers, and Fortis has entered into a licensing agreement to use those brands for a period of nine years.

“We pay a fee Rs 3 crore a year for the two brands (Fortis and SRL),” Bhavdeep Singh, CEO of Fortis Healthcare.

“We are not anticipating any change regarding the terms anytime soon,” Singh added.

Fortis also said it had decided to terminate the services of Malvinder Singh who continues to lead strategic initiatives despite his resignation as executive chairman of the company.

“The company is in the process of taking suitable legal measures to recover the payments made to him under LoA (letter of appointment) as also to recover all company assets in his possession,” Fortis said.

Singh was entitled to receive the Rs 12 crore per annum as remuneration.