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Fortis Healthcare matter: Former official settles case with Sebi

Vishal Bali, a former official at Fortis Hospitals, on Monday settled with markets regulator Sebi a case pertaining to allegedly aiding in the diversion of public shareholders’ funds for the benefit of the promoters of Fortis Healthcare and Fortis Hospitals.

Bali has settled the case after paying Rs 65.02 lakh towards settlement charges. He was one of the members of the Executive Committee/ Treasury Committee of Fortis Hospitals, according to a Sebi order.

The order came after Bali approached the regulator proposing to settle the instant proceedings initiated against him, “without admitting or denying the findings of fact and conclusions of law” through a settlement order.

In its settlement order, Sebi has disposed of the adjudication proceedings initiated against the applicant — Vishal Bali — vide the Show Cause Notice (SCN) dated April 9, 2021.

In the SCN issued to Bali, it was alleged that non-independent directors of Fortis Hospitals, including Bali, had failed to carry out adequate due diligence and exercise independent judgment with respect to the grant of loans or investments by Fortis Hospitals during the period of investigation.

It was thus alleged that Bali was one of the individuals who had aided in the misuse and diversion of public shareholders’ funds for the benefit of the promoters of Fortis Healthcare Ltd (FHL) and Fortis Hospitals Ltd (FHsL).

It was therefore, prima facie, observed that the conduct of Bali had led to the violations of the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, Sebi said in the order.

The observation came after Sebi had conducted an investigation into the alleged siphoning of funds by promoters and related entities of Fortis Healthcare pursuant to a media article in February 2018 alleging the promoters of FHL had taken at least Rs 500 crore out of FHL and that the statutory auditor of FHL had refused to sign off on the company’s second quarter results until the funds were accounted for.

Pending adjudication proceedings, the applicant proposed to settle the instant proceedings initiated against him. Following the application, the settlement terms of Rs 65.02 lakh was proposed by Sebi. Subsequently, the applicant remitted the amount and settled the matter. PTI

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