IHH Healthcare’s auditor issues qualified opinion

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

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 as of Dec 31 last year.

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

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

Before the deal, an investigation by an independent legal firm for the former Fortis board had indicated systematic lapses and/or overriding of internal controls.

The Fortis group had also initiated inquiries of the management of entities within the group.

There are also investigations by the Securities and Exchange Board of India and the Serious Fraud Investigation Office under India's Corporate Affairs Ministry.

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

IHH posted a 15 per cent drop in net profit, excluding exceptional items, for the fourth quarter of last year, as new loans were taken for the Fortis acquisition and for working capital while a unit's euro bank loans and interest were swapped into the appreciating Turkish lira. IHH shares closed 4.14 per cent higher at $1.76 yesterday.

THE BUSINESS TIMES

Drop in IHH Healthcare's net profit, excluding exceptional items, for the fourth quarter of last year.