The Hindu Business Line : Nandas reading fine print in heart centre divestment

THE brouhaha over the divestment of equity in the Escorts Heart Institute and Research Centre Ltd (EHIRC) seems to have resulted in the promoters, the Nanda family, set to go over the process with a fine comb.

Responding to a query from Business Line, on when the agreement was to be inked with Merlion India Fund, the proposed buyer of Escorts' 17.1 per cent stake in EHIRC, Mr Rajan Nanda, Chairman and Managing Director, Escorts Ltd said, "it is at present in the process of sorting out. The due diligences have been completed. However, after what has happened, we are being cautious. We are satisfying the legal processes. We had already sought legal opinion and are revalidating what we have got".

Escorts Ltd in its June board meeting had decided to divest the company's 17.1 per cent in EHIRC. Post-divestment, Escorts would still hold over 60 per cent stake in EHIRC.

However, Mr Anil Nanda, Vice-Chairman and Managing Director of Escorts Ltd, had questioned the legality of the board's decision and recommended that EHIRC should be reverted to the original status of a charitable organisation.

Mr Anil Nanda had circulated a letter of dissent on this issue backed with legal opinions to the members of the board. "He is expecting the board will have a change of heart.

However, he may have to look at legal recourse if this does not happen," sources close to Mr Anil Nanda said.

Mr Rajan Nanda pointed out that there was no question of EHIRC reverting to its original status as a charitable society, as all the legal processes for corporatisation of the heart institute had been completed when it was converted into a company in 2000. He also mentioned that the hospital is still providing concessions and free treatment as part of charity.

Meanwhile, Mr Rajan Nanda said that the proposed alliance with Merlion is a long-term strategy, whereby EHIRC could benefit through its international research practices.

Merlion India Fund, is partly owned by Standard Chartered Pvt Equity Fund and Temasek Holdings, which has interests in life sciences.

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