Shares of Fortis Healthcare extended their losing streak on Friday and dropped over 5% intraday, a day after the Supreme Court awarded a six-month jail term to the company’s erstwhile promoters, brothers Malvinder Singh and Shivinder Singh, in a case filed by Japanese firm Daiichi Sankyo related to Fortis-IHH share deal. The apex court has ordered a forensic audit of the stake sale in Fortis Healthcare to Malaysia-based IHH Healthcare. It also remanded the matter to the Delhi High Court, while extending the stay on the IHH’s open offer for the healthcare company.

Fortis Healthcare, which runs a chain of private hospitals, in an exchange filing said the apex court has maintained “status quo with regard to sale of the controlling stake in Fortis Healthcare to Malaysian IHH Healthcare Berhad’’.

“In this regard we would like to inform that the proceedings before the Hon’ble Supreme Court have concluded with certain directions and the suo-motu contempt has been disposed-off. We are seeking legal advice to decide our future course of action,” it said in a BSE filing on September 22.

“We remain committed to our core purpose of patient care and will continue to focus on our strategic and operational objectives to further strengthen and expand our healthcare network,” it added.

In 2018, IHH Healthcare had acquired a 31% controlling stake in Fortis for $1.1 billion in a bidding process overseen by an independent board. This triggered an open offer to acquire another 26% stake in the company, which was opposed by Japanese drugmaker Daiichi Sankyo. Daiichi had filed a plea against the Fortis-IHH deal to recover the ₹3,600 crore arbitration award it had won in a Singapore tribunal against Singh brothers. The Japanese firm had moved to the court, alleging that the Singh brothers and Indiabulls allegedly pledged shares of Fortis Healthcare held by Fortis Healthcare Holding, despite the apex court forbidding it.

On November 15, 2019, the top court had held the Singh brothers guilty of contempt for violating its order and forbidden them from pledging any more shares in the company. It had also put on hold IHH Healthcare’s open offer bid to acquire controlling stakes in Fortis Healthcare.

The share price of Fortis Healthcare has plunged 21.5% in the past four sessions, as compared to a 1.4% fall in the BSE benchmark Sensex during this period. On Friday, Fortis Healthcare declined as much as 5.2% to hit a low of ₹251.4 on the BSE, after a steep fall of 15% in the previous session. The company’s market capitalisation dropped to ₹19,406.2 as 2.6 lakh shares changed hands over the counter as compared to two-week average volume of 3 lakh scrips by 12 PM.

The stock currently trades 17% higher than its 52-week low of ₹219.80 touched on June 20, 2022. It hit a 52-week high of ₹324.80 on September 19, 2021. The largecap stock has delivered a negative return of 5% to its shareholders in the past one year, while it dropped 13% on a year-to-date (YTD) basis. The counter lost 4% in the last six months and 13% over a month period. 

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