Sebi Slaps Demand Notices on 4 Entities in Fortis Fund Diversion Case.
The four entities that have received notices are Fortis Global Healthcare, RHC Finance, Shimal Healthcare, and ANR Securities.
Capital markets regulator Sebi (Securities and Exchange Board of India) has issued notices to four entities involved in the Fortis Healthcare case, demanding a payment of Rs 4.56 crore within 15 days. The entities, namely Fortis Global Healthcare, RHC Finance, Shimal Healthcare, and ANR Securities, were previously fined by Sebi in May 2020 but failed to make the payment.
The recent notices from Sebi, dated June 9, require the entities to pay the outstanding amount, including interest and recovery costs, within the specified timeframe. If they fail to comply, Sebi has the authority to attach and sell their movable and immovable properties and freeze their bank accounts. In extreme cases, Sebi can resort to arrest and detention to recover the dues.
Sebi had imposed penalties totaling Rs 38.75 crore on 32 entities, including the four mentioned above, in May 2022. The penalties were related to the diversion of funds from Fortis Healthcare Ltd (FHL) and misrepresentation to conceal the fraud. The case dates back to 2018 when it was alleged that the promoters of FHL had diverted significant funds from the listed company. The auditor, Deloitte Haskins & Sells LLP, had refused to sign off on FHL's second-quarter results until the funds were accounted for.
Sebi initiated an investigation into the matter to examine potential violations of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations. The investigation revealed a systematic scheme of fraud orchestrated by the former promoters of FHL. They funneled the company's resources through inter-corporate deposits (ICDs) or short-term loans to intermediate entities, ultimately benefiting RHC Holding, which was indirectly owned and directly controlled by the former promoters.