Fortis Healthcare shares in focus as Supreme Court allows forensic audit to proceed

Shares of Fortis Healthcare Ltd. will be in focus on Monday after the Supreme Court allowed a forensic audit of the hospital chain to proceed, while clarifying that observations made by the Delhi High Court were limited to its consideration of the forensic-audit proceedings.

The development follows an August 31, 2026, order by the Delhi High Court directing that a forensic audit of Fortis Healthcare be conducted. Fortis challenged the order, along with certain observations in the judgment, by filing a Special Leave Petition before the Supreme Court.

While allowing the audit to proceed, the Supreme Court said the observations made by the Delhi High Court were only for deciding the issue related to the forensic audit. It also directed that "the forensic audit shall be conducted independently, without being influenced by the abovementioned observations."


Fortis Healthcare said no liability, penalty or fine has been imposed on the company in connection with the proceedings. The company also clarified that it is not a party to the arbitration proceedings between Daiichi Sankyo and the Singh brothers.

Fortis said it had no ability to control the sale or transfer of shares in the company when Malvinder and Shivinder Mohan Singh were its owners. It added that the transaction involving IHH Healthcare took place after the Singh brothers had ended their association with the company.

"Being a public listed company, the company had no power or ability to control the transfer of shares by its erstwhile promoters, who were the owners of such shares, and the company received no monies or proceeds on account of the dissipation of the erstwhile promoters' shareholding," Fortis said in its filing.

The company said the Singh brothers' stake had fallen below 1% by March 2018, by which time both had also resigned from the board. Institutional shareholders subsequently appointed new independent directors.

In June 2018, the reconstituted board, with the guidance of legal advisers and investment bankers, began a competitive bidding process to bring in a new investor. The process ended with Northern TK Venture Pte Ltd, a subsidiary of Malaysia's IHH Healthcare Berhad, becoming Fortis' controlling promoter shareholder.

The investment was completed in November 2018 through a fresh issue of equity shares after the company secured the required statutory and regulatory clearances, including approvals from the Competition Commission of India, Sebi, stock exchanges and Fortis shareholders.

Fortis pointed out that the transaction took place several months after the Singh brothers had severed all ties with the company and did not involve any transfer of shares held by them. The company said it was confident that an independent forensic audit would confirm these facts and establish that Fortis had no role in the transfer of shares by its erstwhile promoters.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.