The Bangladesh Securities and Exchange Commission (BSEC) cancelled its approval for the initial public offering (IPO) of AFC Health Limited.
Rezaul Karim, executive director at BSEC, confirmed the matter to The Business Standard on Monday.
Back in September 2020, the commission gave its go-ahead to the company to raise Tk17 crore through an IPO.
But the next month, Fortis Healthcare Limited - an India-based company that provides various surgical and management services to AFC Health - requested the BSEC to cancel AFC
Health's IPO saying that its prospectus contained several false and fraudulent representations and statements.
In a letter, Fortis told the BSEC that the agreement executed by AFC Health was limited to Khulna and Chattogram only, but it used their brand name in Cumilla and Jashore as well, which was a breach of their agreement.
The letter also read that there had been several payment defaults by AFC since 2017.
Later, AFC Health wrote to the BSEC requesting conditional consent for the IPO, which was suspended due to the company's dispute with Fortis.
In the letter, AFC Health also said that it has corrected its stance on the total dues to Fortis. The two parties also agreed to sign a no-claim agreement after the completion of payment. The final dues stood at Rs2.81 crore and AFC Health agreed to pay the dues after getting the regulatory approval.
The letter also mentioned that AFC Health moved into the healthcare frontline sector by introducing three hospitals in Khulna, Chattogram, and Cumilla. It was the first initiative by a local corporation to support healthcare outside Dhaka city.
Yet, the BSEC did not accept the company's request.