On Dec 8, 2017, the Delhi Govt canceled the license of Max Hospital after the hospital declared a living baby dead.
Here is a point by point refutation of facts as claimed by Shekar Gupta
|Alternate facts in tweet||True facts|
|“Cancelling Max license..”||Only the license of the hospital that declared the baby dead was canceled. Not all hospitals operating under the Max brand name have been canceled.|
|“Instead of punishing the guilty”||Max Hospital, Shalimar Bagh was found guilty of criminal negligence as per the DGHS inquiry report. The license was canceled.|
|“Hurts 100s of innocent employees”||No basis provided. A corporate cannot be licensed to do wrong for the fear that employees “will be hurt”|
|“Hurts …..patients with ongoing treatment”||Incorrect assertion. Delhi Govt’s order allows the hospital to carry out treatments to patients current at the time of the order|
|“Hurts ….Minority shareholders”||Max India, which has minority shareholders, is in fact, about 45% minority owner of the company* under which the 250 bedded Shalimar Bagh hospital operates. As on 30 Sept 2017, there were 2,369 beds with about a 74% occupancy**. So the total beds affected were just about 10.6%, much less than the spare capacity available to Max network of hospitals for referring willing patients elsewhere. Assuming 50% of such patients can be transferred, the revenue impact is about 2.6%, and earnings loss to minority shareholders will be lower as some costs will be shared across all beds. Thus there is no material earnings loss to minority shareholders.|
*Per FY 2017 annual report
**Per Sept 30, 2017 investor presentation
The author Krishnaraj V is a security analyst & investor based out of Bangalore.