Fortis says 400% hike was a typo; CEO Bhavdeep Singh's salary grew by only 8%

Last Updated: Thu, Jul 05, 2018 20:36 hrs
Bhavdeep Singh, Fortis Healthcare

A screen-grab from Fortis Healthcare's youtube video. Apparently Bhavdeep Singh has committed to donating his organs.

Imagine a situation where one probably spent office time lazing around. This despite the annual KRA sheet showing a lack of productivity. And soon that dreaded letter from the HR team arrives...

But instead of terminating services or a memo reprimanding the drop in productivity, the letter informs a hike in salary.

Surprised? Shocked? Flabbergasted? Flummoxed? Left Speechless? Thanking heavens?

We leave it on you to to choose the best emotion to express your thoughts (you can add that in the commentary box at the end of the story too).

And, for those of you questioning whether such things are realistic, here is a story of Fortis Healthcare's CEO Bhavdeep Singh.

Singh's company needs no introduction. For the past three months, the company has been reported a number of times in the daily press. The healthcare company promoted by erstwhile promoter brothers Malvinder and Shivender Singh, has been alleged of mismanagement.

The stock exchanges have issued notices to the company after the brothers took out nearly Rs 500 crores without board approval to invest in their other businesses. Fortis Hospitals, a media report suggests, had infused Rs 473 crores as an unsecured loan for a short term investment. The brothers have resigned as Directors.

The cash-strapped company reported losses of Rs 73.5 crores in its books for 2015-16. A year later the losses zoomed a bit further to Rs 74.7 crores. The CEO and his immediate team who is usually responsible for everything right from ensuring smooth vending machines in the cafetaria to handling customers, businesses and the entire operations may have taken a flak for a loss making business.

But not Mr Bhavdeep Singh.

A report in the Mint, details the proceedings.

Apparently Singh's emoluments increased at a time when the company made losses. In July 2015, Singh earned a salary of Rs 3.91 crores, but the following year he made a solid jump to Rs 16.80 crores.

That, he made a nearly 400% salary-hike at a company that was all set to be sink, makes this a peculiarly interesting incident.

The gaffe in salary has been attributed as a typo by a Fortis spokesperson. Fortis goes on to reveal that they were aware of the incident. And this spokesperson also suggests that Bhavdeep's salary grew only by 7-8%, which was an "industry norm".

Fortis didn't reply on whether the typist's gaffe was reported to the exchange houses. Sify.com tried to verify from exchange filings, but has been unable to find a single record mentioning the typists gaffe as responsible for Mr. Singh's super-sonic salary hike.

An investigation from law firm Luthra & Luthra finds that the Singh brothers had sought an unsecured loan worth Rs 445 crores, around the same time that the so-called typist's gaffe occured.

The Luthra & Luthra investigation adds, "objections on record indicate that management personnel and other persons involved were forced into undertaking the ICD (inter-corporate deposit) transactions under the repeated assurance of due repayment and it could not be said that the management was in collusion with the promoters to give ICDs to the borrower companies."

The Mint report goes on to quote Shriram Subramanian, founder and Managing Director at InGovern Research as saying, "This is a classic case of golden handcuffs. Basically you want the CEO to toe your line and you pay him more irrespective of the company's performance so that the CEO keeps quiet and doesn’t object to your financial irregularities. This has been simply done so that he toes the line of the promoters."

The case of the salary hike remains a puzzle, considering Fortis' has admitted that the salary-hike in the range of 8%, but has not dispelled the other notions such as other means for buying management' silence for the shady deal to go through.

More from Sify: