Fortis board can’t determine if fraud happened, auditor says: Report

The auditor of Fortis Healthcare Ltd. said the company’s board has been unable to determine if a fraud was committed after an investigation found improper loans were given to parties connected to its former founders.

“At this juncture, the board of directors of the company are unable to make a determination on whether a fraud has occurred on the company in respect of the matters covered in the investigation by the external legal firm,” auditor Deloitte Haskins & Sells LLP said in an exchange filing on Saturday.

India’s second-largest hospital chain Fortis wrote off about 4.5 billion rupees ($65.3 million) in loans after an investigation by an outside law firm found they were granted amid systemic lapses and override of controls.

Fortis’s finances have come under scrutiny by the country’s fraud watchdog and stock market regulator after Bloomberg News reported in February that people with knowledge of the matter said founders Malvinder and Shivinder Singh took at least 5 billion rupees out of the firm without board approval.

The auditor issued a qualified opinion on the company’s financial results, saying that it can’t reach a conclusion. The auditor had said in March that it couldn’t reach a conclusion about the hospital operator’s results because of ongoing investigations into its finances.

Fortis management has said that the audited results are unchanged from unaudited ones. In June, it reported a 9.3 billion rupee loss for the quarter ended March.

Article source: Bloomberg