Chandan Healthcare Clarifies RHP Disclosures in Response to DIMSL Complaint: Cites Inadvertent Error and Ongoing Disputes

Chandan Healthcare Clarifies RHP Disclosures in Response to DIMSL Complaint: Cites Inadvertent Error and Ongoing Disputes​

Chandan Healthcare Limited (CHL) has released a detailed clarification addressing allegations made by Dayal Institute of Medical Sciences Limited (DIMSL) regarding disclosures contained within the Red Herring Prospectus (RHP) dated February 04, 2025. The company asserts that while an inadvertent drafting error existed in one section of the RHP, the matter is heavily intertwined with active commercial and legal disputes between the two shareholder groups.

The correspondence details the long-standing relationship between CHL entities and DIMSL (formerly Chandan Institute of Medical Sciences Limited or CIMS), which began following a Memorandum of Understanding (MOU) executed on December 18, 2021. The Chandan Group invested substantially in CIMSL. These investments were made at a price of 270 per share, with a face value of Re. 10.

As stated by CHL, only 27 per share was called up and paid initially during FY 2021-22. The balance amount of 243 per share remained uncalled as of the date of the RHP. Due to subsequent disputes arising between the two groups, the original promoter group associated with the Chandan Group had since exited management. CHL currently maintains no active financial transactions or operational involvement in DIMSL.

Addressing Share Status and Allegations​

The complaint from Dayal Institute of Medical Sciences Limited alleged that the RHP misrepresented the equity shares held by CHL entities as "fully paid-up."

CHL acknowledged that a statement in the Notes to the Consolidated Financial Statements (page 269) contained an inadvertent clerical or drafting error, stating the shares were "fully paid-up." However, the company countered this allegation by pointing out that the same RHP provided clear and correct disclosure elsewhere.

In Section Our Group Companies - Shareholding Pattern of Chandan Institute of Medical Sciences Limited (page 231) of the prospectus, it was explicitly stated:

• "The shares of these shareholders are partly paid up."
• The amount received from CHL entities for the shares included specific figures such as 8,25,000 for Chandan Healthcare Limited.

CHL clarified that while the inconsistency existed, the existence of this express disclosure in another part of the RHP demonstrated the absence of any intent to conceal or misrepresent the share status. The company further noted that approximately 30,37,50,000 represents the unpaid amount on 12,50,000 equity shares at 243 per share remaining payable.

Defense Against Other Allegations​

CHL also addressed several peripheral allegations raised by the complainant:

• Misleading Hospital Operations: The company stated that the disclosure regarding DIMSL's business activities was based strictly on the main objects set out in the Memorandum of Association, and thus it was not intended to misrepresent its operations.
• Corporate Identity: Regarding the use of the earlier corporate name, CHL noted that the Draft RHP was filed when the entity's name was "Chandan Institute of Medical Sciences Limited." The change to Dayal Institute of Medical Sciences Limited occurred later, and shareholders representing the company were not served with any notice concerning the purported name change.
• Investment Quality: In response to claims about the payment method, CHL confirmed that all share application money was ultimately received through bank transfers. Initially, cheques were received but subsequently converted into bank transfers after they could not be presented or deposited.
• Capital vs. Borrowing: The company clarified that certain amounts transferred by the Chandan Group companies to DIMSL for project funding and construction-related expenses were first adjusted against outstanding call money. Any excess amount was then accurately classified in the books as a loan/borrowing based on its underlying transaction nature.

Dispute Context: A Commercial Backdrop​

CHL emphasized that the complaint must be viewed within the full context of active commercial disputes. The current matters include:

• DIMSL issuing call notices to Chandan Group entities for approximately 54.64 crores regarding unpaid call money, which CHL has disputed as unsustainable in law.
• DIMSL denying payment of an outstanding financial assistance amount of approximately 5.82 crores claimed by the Chandan Hospital Limited.
• Arbitration proceedings are already underway between the parties to the MOU, with notices issued by Rajesh Singh Dayal on February 13, 2026, and March 18, 2026.

The company stated that given the ongoing contentious nature of these disputes, raising allegations against CHL is improper, as they form part of the pending arbitration. CHL reiterated its undertaking to cooperate with regulators, affirming that the error in the RHP was unintentional and did not constitute deliberate fraud or misrepresentation.

BORANA Stock Price Movement​

Borana Weaves Limited saw a minor decline today, settling at ₹318.3 after closing with a 0.06% drop. The equity was traded in a volume of 62,328 shares during the session.