Fortis Healthcare Case: SEBI partially modifies order against Religare Finvest

In the matter of Fortis Healthcare, SEBI recently noted that the proposed measures like the restructuring of RFL's debt, assignment of its gross non-performing assets to ARCs and raising of capital to meet capital adequacy norms seem essential for the revival of the company.

New Delhi: Sebi Friday partly modified its order against Religare Finvest Ltd (RFL) in the matter of Fortis Healthcare by allowing the firm to dispose of its assets subject to certain conditions. In March, the regulator directed Fortis Healthcare Ltd (FHL) and Fortis Hospitals Ltd (FHsL) to continue efforts to recover over Rs403 crore from Shivinder Mohan Singh and Malvinder Mohan Singh as well as seven other entities, including RFL.

Besides, it had asked RFL not to dispose of or alienate any of its assets or divert except for complying with a corrective action plan as stipulated by Reserve Bank of India (RBI). Later, RFL sought relaxations from Sebi in order to execute revival plan for the betterment of the company by taking required steps, including the restructuring of loans and securitisation/ assignment of its assets to Asset Reconstruction Companies (ARCs) to reduce its standing liability.

In its order on Friday, Sebi noted that the proposed measures like the restructuring of RFL's debt, assignment of its gross non-performing assets to ARCs and raising of capital to meet capital adequacy norms seem essential for the revival of the company.

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The proposed measures cannot be taken by RFL unless the direction in earlier order is further relaxed, the regulator noted.

Pending completion of the investigation, RFL shall not dispose of or alienate funds assets "except for meeting expenses of day-to-day business operations and taking all the measurers as it deems fit for revival of RFL, including restructuring of its debts/ loans, assignment of its financial assets to ARCs, raising of capital, borrowing," Sebi said.

However, the relaxations are subject to adherence to the terms of corrective action plan and any other norms stipulated by the RBI.

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