Manipal Health IPO Faces Fresh Hurdle as US-Based Investors Move SEBI Over ₹32.25 Crore Dispute

Five US-based minority shareholders have escalated a longstanding dispute regarding a Kolkata-based subsidiary just days before parent company Manipal Health Enterprises opens its initial public offering.

The group filed a formal complaint with the Securities and Exchange Board of India in April 2026 after the parent firm submitted its Draft Red Herring Prospectus, Moneycontrol reported.

Investors Netar Wadhwa, Meena Wadhwa, Sanjiv Gupta, Rajni Gupta and Sriram K Iyer hold 9,57,706 equity shares in Manipal Hospitals Synergie Private Limited (MHSPL), formerly known as Medica Synergie Private Limited.

They demand accountability from the parent firm for alleged historical wrongdoings involving corporate governance.

The investors assert that the parent organisation must answer for the subsidiary. "Our claims of wrongdoings in MHSPL are against MHSPL and its management, considering that Manipal Hospitals is a super-majority shareholder of MHSPL, in our view, Manipal Hospitals is fully responsible for the same," the report cited the shareholders' statement.

Shareholders Detail Core Grievances

Investors claim they placed Rs 6.95 crore into the firm between 2006 and 2009. They assert the founders promised a 15 per cent annually compounded return on this capital, the report said.

The shareholders also allege severe shareholding dilution — pointing specifically to issuing 50 lakh sweat equity shares priced at Re 0.01 apiece in 2007 — and claim they were excluded from important corporate decisions and denied access to key information.

The aggrieved group issued a demand notice in October 2025 seeking Rs 32.25 crore to cover the alleged assured returns. They followed this legal action with a formal cease-and-desist notice in January 2026.

The investors allege the company denied them access to an internal fraud investigation report explicitly referenced in MHSPL's FY23 Directors' Report. Consequently, they suspect a departing founder received an exit payout of nearly Rs 100 crore based on publicly available records.

The shareholders filed simultaneous complaints with the Reserve Bank of India and the Directorate of Enforcement over an unauthorised change in their status from non-resident to resident.

They also alleged the company failed to provide foreign exchange-related filings when sought.

The investors wrote in their letter that "certain averments and disclosures have been made, which are either incomplete, misleading or trivialise the issue raised by us against the MHSPL and its management".

Manipal Rebuts All Allegations

Manipal Health Enterprises acquired an 84.95 per cent stake in MHSPL during FY25, long after the disputed events occurred. The company informed the investors in a detailed response that the return promise exclusively involved previous promoters.

It added that guaranteeing returns on equity investments is not legally permissible under existing frameworks.

MHEL attributed the contentious residency status change to an inadvertent clerical error in Registrar of Companies filings for FY24 and FY25. The healthcare provider confirmed that RBI records remain entirely accurate and no central bank investigation is underway.

The firm maintains that all material information stands fully disclosed in its Draft Red Herring Prospectus. It stated there is no legal requirement under the Companies Act, 2013 to share the internal investigation report with minority shareholders.

Sameer Agarwal, Group CFO, addressed the dispute directly at a press meet in Mumbai last week. "We have responded to them. It has nothing to do with Manipal. Their concerns relate to the previous management when they had invested in it, and that same thing has been carried on. Unfortunately, they have involved us also," Agarwal said.

Agarwal said the firm disclosed adequate details to all relevant regulators. "They as minority shareholders have written to SEBI regarding that. We have appropriately responded to them, and the same response we have given to SEBI," he added.