HCL has refuted suggestions in the media that the board of HCL has given its support to an offer made by one group of investors in the troubled healthcare firm, and that other investors could lose out.

The denial came after Arundel Capital an investor in the troubled healthcare company wrote an open letter to HCL expressing its concerns that an offer by Toscafund another group of investors to buy up HCL’s debts “had the tacit backing of Locums’ new executive board.”.

A spokesman for HCL, told Recruiter: “HCL is not working with any single party and any reports to the contrary are incorrect. The company continues to await the outcome of the investigation into its accounting and will make a full statement to the market once this is complete and move forward from there.”

In its open letter Arundel Capital, which beneficially owns or controls 580,000 HCL shares said it “was appalled to read an article in the Evening Standard dated 17 June 2011, which described a proposal from Toscafund to purchase HCL’s debt from National Australia Bank and Commonwealth Bank of Australia.

“According to this article, Toscafund’s proposal will effectively wipe out the value of all legacy shareholders with the board receiving “some sort of private equity style performance pay deal.” What is more, apparently there is an alternative proposal that is more favourable for all stakeholders including legacy shareholders.
 
“We hope the multiple articles published about HCL in the past few days are grossly inaccurate. Regardless, we urge the board not to do anything rash and allow all potential buyers of the senior debt to submit a full and fair offer to HCL’s senior lenders, particularly if the ultimate outcome for legacy shareholders is different under the various balance sheet recapitalization proposals.
 
Additionally, we are compelled to comment about the recurring theme in all the recent articles that Toscafund’s offer has the Board’s “support.” For example, the Evening Standard article mentioned above states that, “Toscafund’s offer had the tacit backing of Locums’ new executive board.”

“While we acknowledge the board’s efforts during the past five months, it should go without saying that the board’s role is not to support a preferred outcome. The board does not own the Company, it does not have a vote in the outcome of this process and it is neither a buyer nor seller of the senior debt. The board’s role is to act as an ethical fiduciary and provide all potential buyers of the senior debt with equal access to all relevant information in a timely manner.