Fortis Healthcare on Thursday acceded to investor demand and invited three nominees of institutional shareholders to join its board as part of a larger restructuring exercise.
While the board meeting on Thursday to discuss competing bids for the hospital chain was postponed (to be reconvened on Friday), it decided to invite Suvalaxmi Chakraborty, Ravi Rajagopal and Indrajit Banerjee to join the board as additional independent directors immediately.
The three are expected to attend the board meeting on Friday, when the board said it would discuss further its restructuring.
The move comes amid calls from investors to overhaul the board by calling an extraordinary general body meeting (EGM). Last week the board approved the demand for an EGM.
Ranjan Pai, chief executive officer (CEO) and managing director, Manipal Education and Medical Group (MEMG), said Fortis’ move was a good one.
“There was a need for measures to build shareholder and investor confidence in the Fortis board, and now whatever decision this board takes would reflect that of the shareholders,” he said.
While Chakraborty is former India CEO of State Bank of Mauritius, Ravi Rajagopal is chairman of JM Financial Services, Singapore, and Banerjee is a consultant and former chief financial officer of Ranbaxy.
They were recommended for board positions by Jupiter Asset Management Ltd and East Bridge Capital Master Fund, which, together, control around 12 per cent in Fortis Healthcare.
Last week, the institutional shareholders had asked for the removal of Fortis’ existing directors, including Brian Tempest, Harpal Singh, Sabina Vaisoha and Lt Gen Tejinder Singh.
The reason behind this is not known though East Bridge and a few other investors had opposed the initial merger transaction with Manipal Hospitals.
Investor consultancy firm IiAS had said to evaluate the three bids, shareholders needed more credence at board level.
“All four members of the current board have been associated with either the Fortis group, Religare group, or Ranbaxy for long tenures in the past,” it said
Meanwhile, the board could not deliberate on the multiple binding bids that had come in for the health care chain because a key member of the external advisory committee formed to deliberate on those had resigned a day before.
Renuka Ramnath, former managing director and CEO, ICICI Venture, and head of private equity firm Multiple, had quit the expert advisory committee on Wednesday.
The committee, scheduled to meet on Wednesday, did not conduct business, and hence no recommendations were presented before the Fortis board on Thursday. Fortis had indicated to the stock exchanges earlier that a person of ‘eminent repute’ would fill in for her.