Home Market Fortis Healthcare shareholders seek EGM to remove existing board members

Fortis Healthcare shareholders seek EGM to remove existing board members


NEW DELHI: Some minority shareholders of Fortis Healthcare have asked that the hospital group's existing board of directors be removed and replaced with three independent directors of their choice. The move comes a day before the Fortis board is expected to meet to decide on four offers that have been made to acquire stake in the group.

Fortis Healthcare has received a special notice and requisition to hold an Extra-Ordinary General Meeting (EGM), the group told the Bombay Stock Exchange late on Wednesday. National Westminster Bank Plc, as trustee of Jupiter India Fund, East Bridge Capital Master Fund Ltd and East Bridge Capital Master Fund I Ltd, sent the notice.

The EGM has been sought to remove Dr. Brian Tempest, Harpal Singh, Sabina Vaisoha and Lt. Gen. Tejinder Singh Shergill from the existing board of directors.

The minority shareholders, who together hold 12.04 per cent stake in Fortis Healthcare, are also seeking the appointment of Suvalaxmi Chakraborty, Ravi Rajagopal and Indrajit Banerjee as independent directors.

"The company is evaluating the same and the same shall be placed before the board of directors in due course," stated Fortis in its BSE filing.

The notification shows minority shareholders have been unhappy with the present board of directors that approved a binding agreement to demerge Fortis' hospital business into Ranjan Pai-promoted Manipal Hospitals in a deal proposed by a consortium of Manipal and TPG.

Following the approval of the proposed demerger on March 27, shares of Fortis tanked over 13 per cent, indicating minority shareholders were disappointed with the valuation given to Fortis Healthcare in the deal.

Some like ace investor Rakesh Jhunjhunwala questioned the sanctity of the board of directors that approved the deal and asked that a fairer process be followed in the sale of Fortis.

Fortis' board is expected to meet on Thursday to evaluate bids by Manipal-TPG, China's Fosun, Malaysia's IHH Healthcare and a joint bid from Hero Enterprise Investments and the Burmans of Dabur group.

Manipal-TPG had revised their offer last week, increasing the valuation of Fortis' hospital business by around 21 per cent, according to analyst estimates.

Manipal-TPG, which has a binding agreement with Fortis, is now proposing a price of around Rs 155 for each Fortis share, while the other three contenders have submitted bids that value its share price between Rs 156-160.

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