IHH Healthcare auditor issues qualified opinion

Fiona Lam
Published Fri, Mar 27, 2020 · 02:13 AM

THE external auditor for IHH Healthcare has issued a qualified opinion, as ongoing probes relating to the Fortis Healthcare acquisition may have an impact on adjustments to be recorded in IHH's financial statements.

In its report on Thursday, KPMG said that except for the Fortis deal, IHH's latest full-year financial statements give a "true and fair" view of the financial position of the group and company as at Dec 31, 2019, and of their financial performance and cash flows.

There was a similar qualified opinion in IHH's 2018 audited financial statements, said the Kuala Lumpur-based hospital operator.

IHH had completed the acquisition of Indian hospital chain Fortis Healthcare and its subsidiaries on Nov 13, 2018.

Prior to the deal, an investigation report by an independent legal firm was submitted to the former Fortis board, indicating systematic lapses and/or override of internal controls. The Fortis group had also initiated enquiries of the management of entities within the group. In addition, there are ongoing investigations by the Securities and Exchange Board of India as well as the Serious Fraud Investigation Office under India's Ministry of Corporate Affairs.

Due to the ongoing inquiries and investigations - including the need for any additional investigations by Fortis - Fortis's external auditors are unable to determine if there are any regulatory non-compliances and if any additional adjustments or disclosures may be required as a result of further findings of the investigations.


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In its report, KPMG said that any consequential adjustments may be recorded as adjustments to the assets acquired or liabilities assumed in the acquisition, which will have an impact on the post-acquisition adjustments to be recognised in the IHH group's financial statements.

IHH had posted a 15 per cent drop in net profit excluding exceptional items for the fourth quarter last year, as additional loans were taken for the Fortis acquisition and for working capital while a subsidiary's euro bank loans and interest were swapped into the appreciating Turkish lira.

Shares of IHH on the Singapore bourse gained S$0.06 or 3.6 per cent to S$1.75 as at 9.36am on Friday.


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