India’s tycoon Singh brothers took at least Rs 5 billion ($78 million) out of the publicly-traded hospital company they control without board approval about a year ago, people with knowledge of the matter said.
The funds were reported on the balance sheet of Fortis Healthcare Ltd as cash and cash equivalents, but the money was routed and placed under the control of the Singhs at the time, according to the people. Fortis’s auditor, Deloitte Haskins & Sells LLP, refused to sign off on the company’s second-quarter results until the funds were accounted for or returned, the people said, asking not to be identified as the information is private.
It wasn’t immediately clear what the Singhs may have used the funds for. Fortis founders Malvinder Singh and his brother, Shivinder, have been working to pay back the money so the company can release its results, the people said.
A spokesman for Fortis said the company loaned Rs 4.73 billion to “certain corporate bodies in normal course of treasury operations” as of July 2017, and in the third quarter of the current financial year those companies subsequently became part of the Singhs’ corporate group.
The loans have since been recognised as related party transactions and repayment has commenced, the spokesman said in an emailed statement.