Fortis put 'on watch under implications' by ICRA

Mumbai: Fortis Healthcare's A+ instruments- a 250 crore NCD programme and another 200 crore fund base limits have been put 'on watch under implications' by the Indian Credit Rating limited. This comes after the Rs 503 crore penalty imposition by the government on Escorts Heart Institute and Research Centre Ltd (EHIRCL). EHIRCL is a subsidiary of the Fortis hospital chain.

The fine imposition by the government was a result of violation of land agreement, wherein limited free treatment, was to be provided to poorer patients.The

penalty that was related to 'unwarranted profits' is to be submitted by July 9.

On June 10 Fortis Healthcare in a BSE filing had stated that its subsidiary,Escort Heart Institute and Research Centre (EHIRCL) had received an order from the Directorate General of Health Services (DHS) to deposit Rs 503.36 crore for non-compliance of conditions of land allotment lease.

However, the company had then stated that it would challenge the order for the recovery of 'unwarranted profit' made by Escorts, not following conditions of land lease, since its allotment in 1982.

"EHIRCL has informed us that in a long disputed case pertaining to the period 1984-2007, it has today received an order from DHS for the deposit of an amount of Rs 503.36 crore towards recovery of unwarranted profit made by it for alleged non-compliance of the conditions of allotment/lease of land since its allotment in its allotment in 1982," Fortis Healthcare said in a BSE filing.

'EHIRCL has further informed that the impugned order in its view is legally flawed and untenable,' the company added.

This Wednesday, Fortis shares closed down 1.32 per cent at Rs.160.80 on the BSE, reports Hindu's Business line. This has happened because of the the 'On watch under implications' status granted by ICRA to Fortis healthcare.

Malvinder Singh and Shivinder Singh, the two brothers own a 72% stake in Fortis Healthcare. Fortis is a nationwide chain of 54 hospitals.