The Securities and Exchange Board of India (Sebi) has asked Malaysia's IHH Healthcare Berhad to obtain an order from the Delhi High Court to allow the company to proceed with its proposed open offer for a 26.1 percent stake in Fortis Healthcare, a regulatory filing said on November 17.
The directive comes nearly a week after IHH said it was willing to proceed with the stalled open offer if the capital markets regulator gives it a go-ahead.
The company is the largest shareholder in Fortis with a 31.17 percent stake.
"IHH wishes to announce that the Securities and Exchange Board of India has advised on 16th November 2022 that the open offers should be proceeded with after obtaining an appropriate order in this regard from the Delhi High Court," the exchange filing said.
"In view of this letter from the Sebi, IHH is obtaining advice from legal counsel on next steps."
IHH had in November 2018 acquired, via a preferential allotment, a 31.17 percent stake in Fortis by infusing fresh capital of Rs 4,000 crore. At that time, Fortis was in operational and financial distress, thus the capital was much needed.
The IHH-Fortis deal has been stuck due to a legal battle between Japanese firm Daiichi Sankyo and the former promoters of Fortis.
In September 2022, the Supreme Court awarded six months jail term to former promoters of Fortis Malvinder Singh and his brother Shivinder in a case related to the sale of shares of Fortis to IHH Healthcare.
The former Fortis promoters were facing the court battle after Daiichi challenged the Fortis-IHH share deal to recover the Rs 3,600 crore arbitration award it won before a Singapore tribunal against the Singh brothers for concealing information when they sold Ranbaxy Laboratories to the Japanese pharma major for $4.6 billion in 2008.
In 2018, when some Indian lenders sold the pledged shares of Fortis Healthcare to the Malaysia-based firm, Daiichi went to court alleging that the former promoters of Fortis had assured them that their shares in the Indian hospital chain would cover the arbitral award amount.
The Supreme Court had ordered status quo with regard to the sale of controlling stakes of Fortis to IHH by the Singh brothers.
The order put on hold IHH's open offer for an additional 26.1 percent stake in Fortis, which was scheduled to commence on December 18, 2018 and close on January 1, 2019, entailing a total sum of Rs 3,300 crore.
The proposed open offer was subsequent to IHH clinching a Rs 4,000-crore deal to acquire a 31.1 percent stake in Fortis Healthcare in July 2018. IHH had pipped rival Manipal-TPG combine in the race.
With PTI inputs
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