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Informist, Tuesday, Sept. 29, 2026

 

--SC upholds forensic audit of YES Bank, Axis Bank in Religare-Fortis case 

--CONTEXT: HC ordered bks audit in Fortis Health, Religare Group transaction

--SC: Audit of bks pertain to only transaction by Fortis, former promoters 

--SC: Bks audit doesn't mean probing its affairs other than Fortis transaction 

 

NEW DELHI – Upholding the Delhi High Court's order to direct a forensic audit of banks and financial institutions, the Supreme Court Tuesday said the audit was only related to the transactions between Fortis Healthcare Ltd., its former promoters Malvinder Singh and Shivinder Singh, Fortis Healthcare Holdings Pvt. Ltd., and the banks, including Axis Bank and YES Bank. The high court's direction to conduct the audit was primarily directed against Fortis Healthcare, its holding company and judgment debtors Singh brothers, said a bench led by Chief Justice of India Surya Kant. The high court's order does not mean there should be a fishing and roving enquiry into the affairs of banks other than the given transactions, said the court.

 

YES Bank and Axis Bank had moved the Supreme Court against the high court's order to direct a forensic audit. The forensic auditor was directed by the high court to examine the role of banks and identify the loan facilities secured by Fortis Healthcare, the creation and variation of security, maintenance of security margins, operation of contractual top-up obligations, invocation and sale of pledged shares, release of security, and the outstanding liability corresponding to each transaction.

 

On Friday, the apex court rejected an appeal by Fortis Healthcare against the forensic audit to examine the role of the company, its officers, directors, key managerial personnel, and any other intermediary involved in processing, approving, recording, or giving effect to the transactions involving the Singh brothers. The top court said it needs to be examined where there was a connivance of the former personnel involved with Fortis Healthcare in the Singh brothers diluting their shareholding in the company.  

 

Japanese pharma major Daiichi Sankyo Co. Ltd. had filed an application in the high court seeking forensic audit on transactions in a case where the company sought execution of an INR-35-billion arbitral award to be paid by the Singh brothers. Daiichi Sankyo had also urged the appointment of a forensic auditor to probe transactions between Fortis Healthcare, Malaysia's IHH Healthcare Berhad, and RHT Health Trust of Singapore. It wanted a forensic audit into the conduct of 17 banks and financial institutions, including HDFC Bank Ltd., YES Bank, Axis Bank Ltd., and others.

 

Daiichi Sankyo had said Religare group, which now claims itself as having an independent existence, was party to the fraudulent transactions in which it pushed the companies of Malvinder Singh and Shivinder Singh to insolvency. The Japanese company said it was all done to hinder the execution of the arbitral award that was passed in its favour and not with a view to resolve the companies of the Singh brothers through the corporate insolvency resolution process. 

 

In 2018, IHH Healthcare Berhad acquired a 31% stake in Fortis Healthcare. However, before it could make an open offer to acquire another 26% stake, the Supreme Court imposed status quo on Fortis Healthcare's shareholding, in the same year.

 

Daiichi Sankyo had been opposing the stake sale, saying it should not be allowed until Malvinder Singh and Shivinder Singh pay INR 35 billion they owe to the company. The Japanese company had said the brothers managed to create encumbrances on their stake in Fortis Healthcare despite repeated undertakings before the Delhi High Court that they would not dilute their shareholding in Fortis group.

 

At 1414 IST, shares of Fortis Healthcare traded 1.4% lower at INR 819 on the National Stock Exchange and those of Religare Enterprises traded 0.6% lower at INR 232.54. Shares of Axis Bank were down 0.8% at INR 1,200 and the shares of YES Bank were down 0.3% at INR 21.10.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Himanshi Gupta

 

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