ADK Hospital 'critical'; Aasandha owes MVR 250 million

Chairman of ADK Group, Ahmed Nashid, has said that hospital operations have worsened to the point where it could get shut down due to non-payment of dues from Aasandha.

ADK first shared its concerns during the administration of former President Mohamed Nasheed.

At the Public Accounts Committee of the parliament on Tuesday, Nashid said he had repeatedly sent letters to the Finance Committee, the Finance Minister and the relevant authorities on several occasions since then.

Sharing the details, Nashid said:

“MVR 251 million is due, including payments to many of our suppliers and various parties,” Nashid said.

Nashid said he sent a letter to President Mohamed Muizzu in December 2023 after sending letters to various parties without any progress.

“On December 24, we sent a letter to the President saying that the state debt to ADK had reached MVR 200 million by 2023. We wrote that our operations were coming to a halt,” Nashid said.

"Every month we call and text the Finance Minister and the CEO of NSPA or others. There is a lot of stress in getting the money. It is very difficult because we don't get vital supplies, so it is our request that the funds be arranged”.

Nashid said he has not yet received a reply to the letter from the President. He said he had sent a letter to the Finance Minister as well in March last year.

“We have not paid our tax payments and we have fallen into such a low situation now,” Nashid said.

"Legally, taxes are something we have to pay. But this situation has arisen because of the domino effect. Then again if we don't pay taxes, there are penalties”.

To address the non-payment from Aasandha, other ADK group companies have relied on their earnings and taken overdraft (OD) facilities from various banks.

One of the challenges faced by the hospital whilst taking overdrafts was from the government’s decision to close the Maldives branch of HSBC, one of the banks ADK had taken overdrafts from. He said he shared the story in a letter sent on June 3.

The letter, sent in June, asked for an increase in monthly payments of more than USD 25 million as the situation worsens. Since then, the amount due has crossed MVR 240 million, according to a letter sent in July.

Nashid said the company has not received the money from the state and ADK has not paid the money due to its suppliers.

The suppliers of some life-saving drugs have not been paid for a long time, he said.

“Today, when we combine the hospital and ADK Pharma dues, we have about MVR 250 million outstanding,” Nashid said.

"If you break it even, the hospital is owed MVR 50 million. We are giving a 90-day credit period”.

Nashid said the Finance Ministry pays MVR 25 million every month out of the state's dues to ADK. However, he said the hospital could not be sustained with that amount.

“Operating cost of ADK Hospital is MVR 1.5 million per day. That makes MVR 45 million per month for operating costs,” Nashid said.

In lieu of the state of affairs Nashid said ADK is in a very fragile situation.

According to his information at the committee, the total amount of OD facilities taken out by banks amounts to MVR 150 million. It also has to pay about MVR 17 million annually in interest.

“For you as well as for us, it will be a matter of concern that in the service we are providing, the lack of availability of life-saving drugs could harm the lives of any individual. This will be our concern,” Nashid said.

“Now we are headed towards that... We have come upon it now.. If some suppliers can't deliver something, we're going to go through a lot of stress. We have to get out of this situation at any cost”.