*The issue of diversion of funds from the company is not limited to Fortis alone.*
*The auditors of promoter group’s Religare Enterprises (“Religare”) have also qualified its Q3 financial statements for similar issues. As per their limited review report, “Recently, Company has forwarded inspection reports from RBI on the financial position of Religare Finvest Ltd as on March 31, 2016 and March 31, 2017, raising various concerns particularly additional material NPA* *provisioning (Rs. 798 Crores), diminution in value of investments (Rs. 15 Crores), resultant negative adjustments in net worth, restriction on expansion of credit/ investment portfolios, increase in corporate loan book against RBI directions including some cases of movement of funds from **intermediary borrowing companies to group companies of Religare Finvest Ltd (further corroborated by our review procedures during the year (i.e. further funds have been given during the year to such intermediary borrowing companies to the extent of Rs. 525 Crores) besides continuing weakness of internal control, seeking clarity on roll over of fixed deposits lying with a* *Bank. These may have penal consequences from regulators (including RBI) and would then impact the carrying value of investments of the company in Religare Finvest Ltd. Considering the above, there are indicators on the material impairment of carrying value of investments of the company* *in its subsidiary Religare Finvest Ltd. Extensive review is being conducted.”* *In addition, the auditors have qualified the statements stating, “The company is registered as ND-SI-CIC under Section 451A of RBI Act, 1934 and primarily holding investments in various group companies. Management has informed us that impairment study is yet to be concluded with respect to investments held by the company in its major subsidiary, Religare Finvest Ltd* *constituting more than 75% (aggregating to Rs. 2900 Crores) of the total investments as on December 31, 2017.* *The auditors also state, “Attention is invited to note no.5 (b) of the standalone unaudited financial results referred to in this report in relation to put option exercised by non-resident shareholders of Religare Finvest Ltd on the company (amount involved Rs. 525 Crores approx. as per Hon’ble Delhi* *High Court order dated 5th Jan 2018). Pending litigation in the Hon’ble Delhi High Court, its potential impact due to probable impairment on the increased shareholding of the Company in Religare Finvest Ltd and cash outflows of the company is yet to be considered.”* *These statements by the auditors makes it clear that the modus operandi of Religare been the same as of Fortis in the matter of movement of funds to Group companies. Instead of advancing loans themselves, both Religare as well as Fortis have routed the funds through subsidiaries; Fortis through Fortis Hospitals Ltd and Religare through Religare Finvest Ltd.* *This has helped them avoid seeking shareholder approval. Also, Religare has tried to keep these irregularities under radar by not conducting any impairment study on Religare Finvest* Source: InGovern <http://www.ingovern.com/wp-content/uploads/2018/02/Fortis-Healthcare-Repeat-of-Satyam.pdf> -- Kindly email stock reports at STOCKRESEARCHER@googlegroups.com For sharing knowledge -- NIFTYVIEWS.COM NOW A FREE OPEN SOURCE WEBSITE. http://www.niftyviews.com/ Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture.The administrator of www.Niftyviews.com just provide a platform for the authors to express their opinion and take no guarantee for the genuineness of the same."ANY member of this forum doesnt prepare or publish any research report; or ii. provide research report; or iii. make 'buy/sell/hold' recommendation; or iv. give price target; --- You received this message because you are subscribed to the Google Groups "Niftyviews.com" group. To unsubscribe from this group and stop receiving emails from it, send an email to stockresearcher+unsubscr...@googlegroups.com. For more options, visit https://groups.google.com/d/optout.
