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Tuesday, Nov 15, 2005


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`Escorts sale tussle has not hit business'

Nithya Subramanian

New Delhi , Nov. 14

THE legal spat between the two Nanda brothers - Rajan and Anil — on the sale of the Escorts Heart Institute and Research Centre (EHIRC) and the subsequent land ownership controversy with the Delhi Development Authority (DDA) may have taken away the initial euphoria from Fortis Healthcare. But the company hopes to put all these away quickly and get on with business.

In a freewheeling conversation with Business Line, Mr Shivender Mohan Singh, Joint Managing Director, Fortis Healthcare, said, "As of now, from the business perspective, there has been no impact on Escorts hospital. The patient inflow has not been affected."

But the management has its hands full allaying fears of both patients and employees. Uncomfortable questions related to the future of the institution are being asked. "Nobody wants to work in an uncertain environment. And our focus should be on improving clinical quality," he said.

Elaborating on the issues relating to the conversion of a charitable institution to a company, Mr Singh said that it had been done through a legal process. "We have bought a legal company and Fortis is not a party to the fight between the two brothers," he added.

Also on the DDA land issue, Fortis maintained that the land was granted to EHIRC and the hospital continues to own it. Regarding the 25 per cent free treatment obligation, Mr Singh said that just 10 per cent of the seven acres of land was granted with that clause.

The remaining land was not allotted with any such conditions. "Currently, we offer 7-10 per cent free or subsidised care, which is higher than our liability," he said. The company is hoping to settle the land dispute with DDA quickly.

Meanwhile, Fortis is planning to extend its operations beyond the northern region. "We are now looking at all the regions and the expansion could be a mix of new projects, mergers and acquisitions," said Mr Singh.

The company has so far been funding its growth plans through a mix of debt and equity. But it is not ruling out the possibility of taking on private equity investors or tapping the capital markets. "These we will consider next year," he added.

On the ambitious Medicity project in Gurgaon in the national Capital region, Mr Singh said that he is in talks with Dr Naresh Trehan, Chief Surgeon of EHIRC, on working together in a joint project. Earlier, Dr Trehan too had announced plans of setting up a large healthcare project in the region.

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