Proposed acquisition not an interested person transaction, it says
Source: Business Times, 8 February 2014
THE trustee-manager of Religare Health Trust (RHT), a business trust with hospitals in India, has replied to a Singapore Exchange (SGX) query prompted by a BT article.
Executive chairman of the trustee-manager, Ravi Mehrotra, said that RHT's proposed acquisition of Mohali Clinical Establishment in Punjab, India, from a spiritual organisation known as Radha Soami Satsang Beas (RSSB), is not an interested person transaction (IPT).
BT noted in a commentary yesterday that RSSB's spiritual guru and leader, Gurinder Singh Dhillon, is the father of Religare Health Trust CEO Gurpreet Singh Dhillon. Mr Gurinder's nephews, Malvinder Mohan Singh and Shivinder Mohan Singh, also control the extensive healthcare and financial services businesses respectively under Fortis Healthcare (the sponsor of Religare Health Trust) and Religare Enterprises.
SGX's query concerned the connections between RSSB, RHT and Fortis Healthcare.
In response, Mr Mehrotra said that while the parties mentioned are related by kinship, none of them is a member of the executive body of RSSB that manages its day-to-day functions, nor do they receive distributions or otherwise profit from RSSB. Mr Gurinder, the spiritual head of RSSB, is a member of its general body, but he and his immediate family, as defined by SGX's listing manual, do not have any interest in RSSB, as defined by the Companies Act.
The various relationships were also disclosed to the trustee-manager's board when the transaction in question was discussed.
RHT's acquisition of the Mohali clinic from RSSB was done "on an arm's length basis and on normal commercial terms", said Mr Mehrotra.
This arm's length negotiation had taken into account, among other things, an independent valuation report by the India office of real estate services firm Cushman & Wakefield, which valued the clinic at 2.76 billion rupees (S$56.3 million).
RHT had also agreed to acquire the clinic from RSSB at a lower price of 2.7 billion rupees, Mr Mehrotra pointed out.
He added that RHT CEO Gurpreet Singh Dhillon had disclosed the relationships between the various parties when the transaction was put up to the trustee-manager's board - comprising a majority of independent directors - for approval.
"The decision to proceed with the transaction was made then by the board of directors with knowledge of the above relationship," he said.
Other than the proposed clinic acquisition, there are no relationships, past or existing, between RHT and RSSB, Mr Mehrotra said. RSSB Singapore held 2.04 million units in RHT as at Nov 15, 2013, or 0.26 per cent, he added.
RHT closed at 76 cents yesterday, down half a cent.