Escorts Heart by Fortis is maintained by HC

The Delhi High Court ordered the institution and seven other parties to maintain the status quo regarding the sale till November 22. This has put a stop to Fortis Health Care’s plans to acquire Escorts Heart. Justice Anil Kumar ordered status quo until the next date of hearing, November 22, in response to a plea filed by Anil Nanda contesting the change of the Escorts Heart Institute and Research Centre (EHIRC) from a charitable institution to a company/non-charitable entity. On Wednesday, Escorts Chairman Rajan Nanda agreed to sell 90% of EHIRC’s equity to Ranbaxy-controlled Fortis Health Care for a total worth of Rs 650 crore. Nanda had stated, “We are receiving Rs 585 crore in the all cash deal.” Anil, Rajan’s younger brother, had opposed the sale and filed a lawsuit asking for the court to prevent the conversion of the charitable trust into a business. The Escorts Heart Institute, EHIRC, Ritu Nanda, Rajan Nanda, GB Mathur, registrar of businesses, and other parties were also served with notices by the court. the registrar of companies, Jalandhar; the registrar of societies, Chandigarh; and the registrar of companies, Delhi. It requested that they all submit their responses by November 22. Escorts, which has been drowning in debt, was thought to be saved by the deal. After 2002-03, when it generated a pitiful Rs 2.4 crore in post-tax profit on a total of Rs 1,124 crore in revenue, the firm had stopped turning a profit. In the quarter that ended in June 2005, the company reported a net loss of almost Rs 57 crore, partly as a result of high interest costs.