Fortis Healthcare CFO Gagandeep Singh Bedi resigns
Photo Credit: Shah Junaid/VCCircle

Hospital chain Fortis Healthcare Ltd said on Thursday that Gagandeep Singh Bedi has resigned as its chief financial officer.

Bedi resigned due to personal reasons, Fortis said in a stock-exchange filing. His last day at the company will be 30 September.

Bedi has been with the company for almost seven years and was appointed CFO of Fortis in September 2014, replacing Sandeep Puri.

His resignation comes weeks after Fortis accepted Malaysian firm IHH Healthcare Berhad’s takeover proposal following a protracted bidding war.

The race took several twists and turns amid concerns over Fortis’ deteriorating financial health and a barrage of legal matters associated with former promoters Malvinder Singh and his brother Shivinder Singh.

A media report earlier this month suggested that Bedi was aware of the alleged financial misdoings by the Singh brothers. 

Mint reported that Bedi and Fortis chief executive Bhavdeep Singh were in the know about loans being directed to three entities associated with the erstwhile promoters.

In July, Fortis had accepted a proposal from IHH to inject as much as Rs 7,300 crore ($1.06 billion) into the Indian hospital chain, making it the largest investment in the South Asian nation's healthcare sector.

Fortis shareholders approved the company’s acquisition by IHH earlier this month. The deal is now awaiting approval from the Competition Commission of India (CCI).

Fortis said it will make a preferential allotment of shares to IHH for a total of Rs 4,000 crore at Rs 170 apiece, which is a premium of about 20% to the current market price. This would give IHH a 31% stake in Fortis.

IHH will then make a mandatory open offer to from Fortis shareholders to buy a stake of up to 26% more for up to Rs 3,300 crore. This means IHH's total stake in Fortis could go up to 57%.

Meanwhile, to tackle financial irregularities at the hospital chain, Fortis had said in June that it will take legal measures against Malvinder Singh for alleged fraud as the company revealed a multi-fold jump in losses for the year through March.

Fortis had submitted an investigation report on the alleged misuse of funds with the Securities and Exchange Board of India and the Serious Fraud Investigation Office, part of the Ministry of Corporate affairs.

The investigation by law firm Luthra & Luthra revealed that there were certain systemic lapses resulting in higher provisions, Fortis said. The company had also said it will appoint an external agency to establish the highest level of governance and internal controls.

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