Our Bureau Four directors of Fortis Healthcare, whose removal was sought by two minority shareholders of the company last month, have written to all shareholders asking them to take an ‘informed decision’ while voting on the matter.

The directors —Brian Tempest, Harpal Singh, Sabina Vaisoha and Tejinder Singh Shergill — through extensive explanations tried to refute allegations that they had not satisfactorily exercised their respective fiduciary duties towards all shareholders and had failed to maintain expected levels of corporate governance.

The request for an extraordinary general meeting to vote on the removal of directors came from National Westminster Bank Plc as a trustee of Jupiter India Fund, East Bridge Capital Master Fund Ltd and East Bridge Capital Master Fund I Ltd. “Through this note, we would like you to evaluate some of the key decisions taken by the board which should be considered while forming a view about the board and its functioning with regard to its fiduciary duties,” the letter to shareholders stated.

Board meet today

The letter to the shareholders has been written ahead of the crucial expert panel and board of directors’ meeting on Thursday to decide on the binding bids that have come in for Fortis. The EGM will decide on the fate of the directors on May 22.

On the decision of the board to evaluate only binding bids made for the company, the letter from the directors explained that the board wished to end the seemingly unending process in the best interest of the company. “The non-binding bids involve considerable uncertainty and merely running a due diligence process does not guarantee a binding bid which the board had wanted in the best interest of the company,” the note said.

The letter also explained the steps taken by the board when investigations by SEBI were initiated against the company and its former promoters Malvinder Singh and Shivinder Singh. The note also explained the process undertaken to fill the recent vacancies on the board of directors. “As members of the current board and keeping in mind our fiduciary duties, we think it is imperative that the company does not lose any more time and considers the offers in hand as adequate and substantive. At the same time, we want to ensure transparency and independence in decision-making. Thus, we have formed an independent Expert Advisory Committee to advise the board...,” it added.

IHH Berhad clarification

A complete change of the entire board at this time will certainly add more turbulence and ambiguity for the company as well as the management, it added. The binding bids to be evaluated include ones from Manipal-TPG, IHH Berhad, the Munjal-Burman duo and KKR-backed Radiant Life Care.

Meanwhile, one of the bidders — Malaysia’s IHH Berhad, has submitted a clarification to the board on its revised proposal submitted on May 1, the last date for submission of bids. In its May 1 offer, IHH Healthcare had offered to invest ₹650 crore at a valuation of ₹175 a share which was binding, while the balance ₹3,350 crore of investment was subject to due diligence. In its clarification, IHH said the due diligence exercise shall only result in a ‘go’ or ‘no-go’ outcome, as the case may be, where IHH will decide to either consummate the subsequent equity infusion or not.

“The due diligence is not intended to be a price adjustment mechanism for the subsequent equity infusion,” the firm said.