Bhavdeep Singh, CEO of Fortis Healthcare Ltd, may be in for some trouble over his annual salary, which jumped by over 400 per cent in two years after he joined the cash-strapped company in July 2015. According to a report published in the Mint, Singh, who was hired at a salary of Rs 3.91 crore in July 2015, saw his salary jump to Rs 16.8 crore in the following year.
During his appointment, Singh also received a joining bonus of Rs 7.5 crore and over 2.5 million stock options. The exponential hike in Bhavdeep's salary comes at a time the company has reported repeated losses in two years and has been in deep financial troubles. Ever since Bhavdeep Singh was roped in as CEO by the country's second-largest hospital chain, its losses rose from Rs 73.6 crore in 2015-16 to Rs 74.7 crore in 2016-17. The company had reported its loss of Rs 34 crore for the first time in 2014-15 since 2008-09 fiscal.
Besides, Fortis Healthcare Limited posted a whopping 864 per cent jump in its net loss for the quarter that ended in March compared to the corresponding quarter in the previous fiscal.
A recent report on the allegations of syphoning off cash by the company founders Malvinder Singh and Shivinder Singh, which was submitted by the law firm Luthra and Luthra, stated that unsecured loans worth over Rs 445 crore were given to the Singh brothers during this period.
Malvinder and his brother Shivinder Singh had resigned as directors from Fortis Healthcare's board in February this year, following the Delhi High Court order upholding the Rs 3,500 crore arbitral award in favour of Daiichi Sankyo.
Meanwhile, a Fortis spokesperson told Mint that the assertion is factually incorrect as there is a 'typo' in the FY16-17 annual report with an incorrect number, grossly overstating Singh's income. "We are aware of this and a correction will be published in the upcoming 17-18 report," he said.
The company representative, however, failed to answer whether the error was brought to the notice of all the concerned authorities -- market regulators, registrar of companies, auditors, etc. Experts believe the company is now trying to cover up the issue, fearing more scrutiny. Some also believe that Singh might have been offered high salary so that he could have toed the line of the Singh brothers.
The Fortis board has submitted the report to the Sebi and Serious Fraud Investigation Office (SFIO) of the government. It also said that the company has made provisions of around Rs 580 crore in Q4 of 2017-18 to the loans whose "recoverability is doubtful".
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