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AFC Health's Indian affiliates request BSEC to cancel its IPO approval

  • Published at 08:09 pm October 21st, 2020
AFC Health logo
AFC Health logo Collected

The Indian companies also said that AFC knowingly made and gave false statements, in breach of applicable law, thus misleading the commission

India's Fortis Healthcare Limited (FHL) and Escorts Heart Institute and Research Centre Limited (EHIRC) recently urged the Bangladesh Securities and Exchange Commission (BSEC) to cancel AFC Health's Initial Public Offering (IPO) approval as they provided false information and misreporting about the Indian brands in their IPO prospectus.

Both the Indian companies had sent a letter to the stock market regulator on October 13 in this regard.

On September 16, the BSEC had approved the prospectus for IPO of AFC Health Limited to raise Tk17 crore. Under the fixed price method, AFC Health will offload three core ordinary shares for Tk10 each.

Net proceeds from the IPO will be used for purchase of machinery and equipment and to meet IPO expenses.

According to the financial statement ending June 30, 2019, the company's net asset value (NAV) per share was Tk13.13, while earnings per share (EPS) were Tk1.47.

Imperial Capital Limited and CAPM Advisory Limited will act as the issue manager for the IPO process.

AFC Health provides tertiary level cardiac care facilities in Khulna, Jessore, Chittagong and Comilla, in affiliation with Fortis and Escorts Heart Institute of India.


Also Read: BSEC approves AFC Health's IPO


As per AFC Health's IPO prospectus, an operation and management agreement were signed at New Delhi on February 4, 2015 between Fortis Healthcare Limited and AFC Health Limited. 

As per the agreement, Fortis would provide efficient and effective operation and management services, outsourcing and/or licensing any part of the cardiac centre for other ancillary purposes.

FHL and EHIRC said in the letter that the agreement was supposed to cover Khulna and Chittagong regions only. 

They claimed that AFC Health had no right to operate any healthcare facilities using the Fortis brand at any other location.

The Indian companies also said that AFC knowingly made and gave false statements, in breach of applicable law, thus misleading the commission. 

"We ask that the commission should take initiative appropriate action and investigation against AFC Health for making false, incorrect and misleading statements in a document inviting funds and investments from the general public," their letter stated.

Moreover, the BSEC should ensure that the proposed public issue of shares is not allowed so that the public investment and funds can be protected, it also said.

General Manager (Operation) of AFC Health Md Taufiq Hasan told Dhaka Tribune that the management of  Fortis India had changed several times, and finally Malaysia based IHH took control over Fortis Healthcare recently, which is slated to rebrand itself as "Parkway" sometime next year, as per the new deal.

“Our reply and clarification against Fortis India’s letter was clear - We had valid agreement for our Comilla unit with Fortis Hospitals Limited since May 10, 2017 with a duration of 15 years,” he added.

“Jessore is an outreach clinic of Khulna, established by the book. It was established to increase the footfall at our Khulna hospital,” he further remarked.

“AFC Health aims to bring world class healthcare facilities to the people of Bangladesh. Our vision is to provide international standard treatment facilities even in the most remote regions of the country," Taufiq said.

Talking to Dhaka Tribune, BSEC spokesperson Mohammad Rezaul Karim acknowledged receiving such a letter from the Indian organizations, and said the commission was looking into the matter.

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