The feuding ex-billionaire brothers: Shivinder Singh sues Malvinder over alleged mismanagement of Fortis empire
- Shivinder and Malvinder, who are the founders of
Fortis Healthcare, are being investigated for the siphoning of ₹23 billion worth of funds from their listed companies.
- On September 4th,
Shivinder Singhannounced that he had filed a case against Malvinder and Sunil Godhwani, the former chairman of Religare, for their role in the “oppression and mismanagement” of their businesses.
- A number of Indian regulators, including the SEBI and SFIO, are looking into the financial irregularities and diversion of funds at the brothers’ companies.
The decline of the healthcare czars, Shivinder Singh and brother
The brothers are being investigated for the loss of ₹23 billion from their listed companies, which has resulted in their public shareholdings being frozen. Fortis, which has been posting losses since 2015, has been at the centre of a money-laundering scandal related to the approval of unsecured loans to the brothers.
Another financial services subsidiary, Religare Enterprises, which owned by them and was run by a close confidante, Sunil Godhwani, has also been hauled up by authorities for the siphoning of funds to firms that were privately held by the brothers.
It has been speculated that the funds have gone towards the real estate investments of a spiritual sect, the Radha Soami Satsang Beas- the leader of which is the brothers’ uncle.
The brothers also owe $500 million to Daiichi-Sankyo, which bought
And now, a lawsuit
On September 4th, Shivinder Singh announced that he had filed a case against his older brother Malvinder and Godhwani in the
Shivinder claims he has no part to play in the downfall of the companies as he left the business in December 2015 to join his uncle’s spiritual sect. He also allocates most of the blame to his brother Malvinder, who was chairman of the Fortis Healthcare over the period when the financial irregularities took place. The statement is in stark contrast to one issued last month by both the brothers that placed the blame squarely on Godhwani’s shoulders.
As things stand, a number of Indian regulators, including the Securities and Exchange Board of India (SEBI) and
Meanwhile, Fortis Healthcare will get a short-term lifeline from IHH Bhd, a Malaysian healthcare group. IHH is set to invest around ₹40 billion in India’s second-largest hospital chain for a 57% stake. The investment will ensure that the cash-strapped Fortis continues its operations for the foreseeable future.