Chandan Healthcare Responds to Complaint by DIMSL over RHP Disclosures, Citing Clerical Error

Chandan Healthcare Responds to Complaint by DIMSL over RHP Disclosures, Citing Clerical Error​

Chandan Healthcare Limited has issued a detailed clarification in response to a complaint filed by Dayal Institute of Medical Sciences Limited (DIMSL) regarding the description of shares in the Red Herring Prospectus (RHP) dated February 04, 2025. The company asserted that while an inadvertent drafting error existed in one section of the RHP, the partly paid-up status of the shares was adequately disclosed elsewhere within the document.

The correspondence between the parties relates to a long-standing investment relationship established through a Memorandum of Understanding (MOU) dated December 18, 2021, which involved CIMS (the original entity). Chandan Healthcare Limited and other Chandan Group entities held equity shares in CIMSL/DIMSL.

Investment Status and Relationship Dynamics

The initial investment was made during FY 2021-22 at a price of 270 per share, with a face value of 10. Of the total amount, only 27 per share had been called up and paid; the balance amount of 243 per share remained uncalled as of the RHP date.

The relationship subsequently deteriorated following disputes between the Chandan Group entities and Rajesh Kumar Singh, Sunita Singh, and Parth Singh. These parties took over the management and control of CIMS, renaming it DIMSL, while the original promoter group exited management. The Company stated that it currently holds no active financial transactions or operational involvement in DIMSL.

Clarity on RHP Disclosures

The complaint centered on the allegation that the RHP incorrectly described the shares held by CHL as "fully paid-up." Chandan Healthcare Limited acknowledged that an inadvertent clerical/drafting error occurred in the Notes to the Consolidated Financial Statements (page 269) of the RHP, describing the shares as "fully paid-up."

However, the company noted that the RHP itself contained a section titled "Our Group Companies - Shareholding Pattern of Chandan Institute of Medical Sciences Limited" (page 231), which explicitly and correctly stated: "The shares of these shareholders are partly paid up. Only Re. 1 is received from them... for Chandan Hospital Limited, Chandan Healthcare Limited, Chandan Pharmacy Limited and Chandan Singh Foundation have paid on 8,50,000, 8,25,000, 4,25,000 and 1,48,150, respectively."

CHL contended that the presence of this express disclosure elsewhere in the RHP demonstrated no intent to misrepresent or conceal the share status. The company also clarified that an unpaid call liability amounting to approximately 30,37,50,000 existed for 12,50,000 equity shares at 243 per share remaining payable, noting that its non-separate presentation in financial statements was inadvertent and not intended as willful suppression.

Context of Ongoing Commercial Disputes

The complaint by DIMSL is set against a backdrop of active commercial disputes between the parties:


Chandan Healthcare Limited added that these disputes underscore the complaint's motivation, suggesting it is motivated by a desire to evade outstanding repayment obligations owed to Chandan Hospital Limited via post-dated cheques. The company requested regulatory authorities to consider the matter in its full commercial context.

The Company also addressed allegations regarding the mischaracterisation of capital receipts as secured borrowings, stating that amounts transferred by the Chandan group companies for funding and construction were duly adjusted against outstanding call money, with any excess classified as loan/borrowing based on underlying transactions.

CHANDAN Stock Price Movement​

Today, Chandan Healthcare Limited shares slipped by 2.19%, closing at ₹206.60 after shedding ₹4.65 in trading. The stock’s movement for the day saw it trade within a range established between a high of ₹216 and a low of ₹202.1.