Singapore-listed medical property developer International Healthway Corp (IHC) appears to have reneged on bank borrowings that have cost it two major rent-making properties - and possibly a third - raising questions as to whether the group may have been more pressed for liquidity than it has disclosed to shareholders.

The Australian Financial Review reported yesterday that Australian lender Westpac has appointed receivers to two office properties owned by IHC in Melbourne, and that a third property, Geelong Medical Centre, is understood to be under the control of receivers through the National Australia Bank.

The two buildings in Melbourne's St Kilda Road alone boast big-name tenants such as the United States Consulate, and had a fair value of $89.8 million according to IHC's annual report.

The news has dealt yet another blow of frustration to shareholders. To date, Catalist-listed IHC has given little indication in its public filings that its talks with mortgagee banks were souring.

The last mention IHC made of its Australia bank borrowings seems to have been in its annual report released in June.

The group said then that it was negotiating an extension of the maturity of $55 million in borrowings from August, and "looking to dispose certain non-core assets" to repay the loans which were secured on the Australian properties.

The group's financial statements for the year ended Dec 31 last year had been prepared on a going concern basis although current liabilities exceeded current assets.

IHC added in a note that "the proceeds from the forced sale of these investment properties will be in excess of the amount required to settle all of the charges placed over these assets".

Given that receivership is an outcome that can usually be anticipated by borrowers when they fail to pay, the question arises as to why shareholders and bondholders were not updated sooner by the IHC board. IHC has $50 million 7 per cent notes that come due next year.

An e-mail to Ms Lim Beng Choo, IHC executive director, asking what impact the receivership would have on the group's other loan covenants was not answered by press time. A receptionist at IHC's office said Ms Lim was out of the office.

Another matter that is troubling shareholders is a disclaimer of opinion issued by auditors PwC in June, which cast doubt on IHC's ability to continue as a going concern.

These arose as the group could not provide satisfactory documentary support for certain estimates and assumptions used in valuing two China properties, PwC wrote.

PwC also took note of the fact that fund manager Crest Capital Asia had appointed receivers over the shares of three IHC subsidiaries in April, after sending them notices of default.

Yet, some $23.4 million of the amounts claimed were not recognised on IHC's balance sheet.

Instead, IHC's board of directors had taken the view that the notices of default were invalid and "hence an outflow of economic benefit is less than probable".

IHC posted a net loss of $869,000 in the three months to June 30.

Last Friday, two shareholders filed a requisition notice to the board, calling for the removal of Ms Ng and three other directors "after taking into account the worrying performance and developments of the company", though they did not delve into details.

Correction: An earlier version of the story stated that the group's financial statements were prepared on a going concern basis because its current liabilities exceeded current assets. This is incorrect. The financial statements were actually prepared on a going concern basis in spite of that. We are sorry for the error.