Malvinder Singh's Contract Under Fortis Healthcare Board Scanner

While Singh has tendered his resignation as a director of the board, he continues to be an employee of Fortis, and is thus entitled to receive the Rs 120 million per annum remuneration

Fortis Healthcare board, which met on Monday to approve its fourth quarter and financial year results, may soon take a call on the employment contract of erstwhile promoter and executive chairman Malvinder Singh.

Sources claimed that the newly-constituted board may be discontinuing the employment of Singh, who after resigning as a director, continues as lead, strategic initiatives, of Fortis Healthcare. An email sent to Fortis did not elicit any response.

Malvinder, who along with brother Shivinder resigned from the Fortis board in February, was appointed at the strategic initiatives for a period of five years with effect from October 2016 at a remuneration of Rs 120 million per year. The company’s 2016-17 annual report mentioned that Singh was paid a remuneration of Rs 60 million for 2016-17. As the executive director of Fortis during 2016-17, he did not draw any remuneration, however.

While Singh has tendered his resignation as a director of the board, he continues to be an employee of Fortis, and is thus entitled to receive the Rs 120 million per annum remuneration.

It could not be independently confirmed if there was any severance clause for termination of service.
Legal experts felt that such employment contracts usually have a breakage clause.


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Singh brothers had stepped down from their board positions in February after the Delhi High Court upheld the Rs 35-billion arbital award in favour of Daiichi Sankyo.

Earlier in June, the hospital chain’s board had postponed the results to June 25 to consider the findings of an investigation report into the ‘controversial’ party transactions. As a consequence, the decision on stake sale has also been delayed and the last date for submission of binding bids has been extended to June 28.

In February, the board’s audit and risk management committee had asked law firm Luthra & Luthra to carry out an independent investigation following allegations of fund diversion by its erstwhile promoters.

Fortis had then clarified that the company had given loans of Rs 4.73 billion to certain corporate entities last year. These loans were recognised as related party transactions and repayment had commenced, according to Fortis.

Reference - https://www.business-standard.com/article/companies/malvinder-singh-s-contract-under-fortis-healthcare-board-scanner-118062600032_1.html