Daiichi Sankyo Case: Supreme Court Asks Banks & Financial Institutions To Disclose Documents Related To Fortis Healthcare- IHH Healthcare Deal
On Thursday, the Supreme Court instructed banks and financial institutions to record several documents on or before 22 February 2021 to decide their position in alienating the shares of Fortis Healthcare via its agreement with IHH Healthcare. On 24 Feb 2021, the case will be taken for further consideration. The three-Judge Bench of Justices UU Lalit, Indira Banerjee and KM Joseph instructed the banks to record the documents relating to advanced loans or extended financial accommodation in respect of which the shares of FHL and the existence of the securities offered under such loan arrangements have been pledged to them.
The banks and financial institutions were asked to provide the details of the FHL standing in the name of FHHPL's encumbered and unencumbered shares that were placed under encumbrance by them after 11 August 2017, when the top court issued a status quo order. Through its order of 11 August 2017, the Supreme Court ordered that the status quo be maintained with respect to Fortis Healthcare Holding Private Ltd's shareholding in Fortis Healthcare Limited in respect of both the encumbered and unencumbered shares. This was followed by applications filed by various banks and financial institutions seeking amendment to the previous order of the high court. Those banks, including Axis Bank and Yes Bank, submitted that, since certain FHL shares held by FHHPL had already been pledged to these banks, an order should be issued stating that orders dated to the status quo order would not be applicable to the shares in question. The Court observed that both the Senior Counsel submitted that, by various orders issued by the High Court and the Supreme Court, it was not possible for the individuals and corporate entities concerned to sell the shares held by FHHPL directly and, consequently, that the equipment was used and the arrangement was structured in such a way that the shares were pursued by the banks and the financial institutions. It was submitted that the banks had interfered in the matters pending before this Court, that they were certainly informed of the Award given in favour of M/s. Daiichi Sankyo Company Limited; and that, therefore, closer scrutiny would require the role of banks and financial institutions.