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. |
Source:
*Per FY 2017 annual report
**Per Sept 30, 2017 investor presentation
The author Krishnaraj V is a security analyst & investor based out of Bangalore.
