Fortis Asks Sebi To Arrest Malvinder, Shivinder Singh For 400-Crore Fraud

Fortis Healthcare Ltd petitioned market regulator to arrest its founders after the Singh brothers failed to repay Rs 400 crore ($56 million) that the watchdog had found they had fraudulently taken out.

The company earlier this month had requested the Securities and Exchange Board of India to use its legal authority to recover the money from Malvinder and Shivinder Singh, said Fortis spokesman Ajey Maharaj. The regulator in October had ordered the Singhs, formerly controlling shareholders, to return the money, plus interest, within three months.

Malvinder Singh and Sebi spokesman N Hariharan couldn't be immediately reached through phone and text messages. Shivinder Singh declined to comment. Responding to Mint, Shivinder said he had no control over decisions or transactions made at Fortis after retiring from all executive roles in September 2015.

The petition deepens the legal jeopardy faced by the ex-billionaire brothers, who have lost much of their corporate empire to debt, and are still being chased by creditors. Lenders seized much of the Singhs' pledged shareholding in Fortis, the nation's second-largest hospital chain that is now controlled by  IHH Healthcare Bhd.

They are also being pursued in a court by Japanese drugmaker Daiichi Sankyo Co Ltd for $500 million to settle a separate fraud case.

The reversal of fortunes has led to family acrimony. Elder brother Mr Malvinder filed a separate police complaint accusing Mr Shivinder and the pair's spiritual guru of defrauding their family holding company. That came after the brothers' mother had  brokered a truce that caused Mr Shivinder to withdraw a lawsuit against Mr Malvinder alleging "oppression and mismanagement."

Fortis' shares have declined 15 per cent in the past year after allegations against Singh brothers were reported by Bloomberg. The stock gained 0.3 percent at the close to Rs 136 in Mumbai on Monday.