Two more Fortis directors quit ahead of crucial shareholders’ meet tomorrow

Fortis innvestors Jupiter India Fund and East Bridge Capital Master Fund had sought the removal of the directors for allegedly failing to work in the interest of all shareholders, particularly in their handling of the hospital chain’s proposed sale.

Fortis Healthcare on Monday said two more of its directors, Harpal Singh and Sabina Vaisoha, have resigned -- a day ahead of a crucial meeting of shareholders called to vote on the removal of four directors of the cash-strapped healthcare chain.

Tejinder Singh Shergill had resigned on Sunday. He was among the four directors along with Singh, Vaisoha and Brian Tempest whose removal has been sought by investors National Westminster Bank Plc as trustee of Jupiter India Fund and East Bridge Capital Master Fund.

The two institutional investors, which together hold 12.04% stake in Fortis Healthcare, had demanded last month that these four directors be removed from the board and had called for the company’s EGM on May 22 for shareholders to vote.

These investors had sought the removal of the directors for allegedly failing to work in the interest of all shareholders, particularly in their handling of the hospital chain’s proposed sale.

At the same time, these two institutions had also sought to seek shareholders’ nod for appointment of three directors -- Suvalaxmi Chakraborty, Ravi Rajagopal and lndrajit Banerjee to the company’s board.

In a BSE filing on Monday Fortis said Singh, who is also Chairman Emeritus of the company, has resigned as a non-executive director with effect from May 20 citing personal reasons.

Similarly, Vaisoha also put in her papers to step down as non-executive independent director on the company’s board, the company said in a separate filing.

Singh in his resignation letter to fellow board members, said “despite delivering a good outcome for the company and its shareholders there still persist some less informed attempts to steer the board and the company into a situation that could be perilous for the company’s future”.

He also defended the board’s decision to go with the final Munjal-Burman bid saying it “was selected on criteria of certainty, simplicity of structure, no walk away rights, an early infusion of funds, capacity to address strategic needs and the ability to traverse a challenging landscape”

Vaisoha in her resignation letter said: “As the shareholders have expressed the desire to bring in a new board, I welcome their decision and I would be happy to step down from the board.”

Shergill had resigned from the board on Sunday citing personal reasons.

Earlier this month, the four directors had sent a joint representation to the shareholders of the company refuting allegations of not exercising their fiduciary duties and stated that they fairly represent interests of all shareholders.

They had also claimed that the change of the entire board at this time will certainly bring more turbulence and ambiguity to Fortis as well as its management.

They had asked shareholders to take an informed decision while voting on a resolution seeking their removal.

Fortis Healthcare is trying to finalise a new owner after receiving bids from five suitors, which included Manipal-TPG combine, Malaysia’s IHH Healthcare, KKR-backed Radiant Life Care, China’s Fosun Healthcare besides the successful bidder Munjals-Burmans combine.