Fortis Healthcare said it will appoint an external agency to scrutinise its internal controls and compliances after an investigation found lapses including possible siphoning of funds by erstwhile promoters, the Singh brothers.
Allegations had been levelled against the brothers after a report by Luthra and Luthra law firm found that ₹500 crore was taken out by the founding family from the company through inter-corporate deposits (ICDs).
In its 2017-18 annual report, the company said: “With respect to the other matters identified in the Investigation Report, the Board will appoint an external agency of repute to undertake a scrutiny of the internal controls and compliance framework in order to strengthen processes and build a robust governance framework.”
Powers of board
The company further said, “Towards this end, they will also evaluate internal organisational structure and reporting lines, the delegation of powers of the Board or any committee thereof, the roles of authorised representatives and terms of reference of executive committees and their functional role.”
It added, “We will also assess the additional requisite steps to be taken in relation to the significant matters identified in the investigation report, including inter alia, initiating an internal enquiry.”
Addressing the shareholders, Fortis Healthcare Chairman Ravi Rajagopal said the new board is also “making a much more involved effort” in understanding the controls and process frameworks within the company.
“Our focus in the future will be on strengthening governance and transparency and restoring the health of the business,” he said.
In July, Malaysia’s IHH Healthcare had won the race to take control of Fortis with plans to immediately invest ₹4,000 crore.