Bengaluru: The Kirloskars have finally sold of their share in Sakra Hospital in Bengaluru to their two Japanese partners Secom Medical Systems and Toyota Tsusho Corporation (TTC); making the enterprise a 100% FDI venture. With the culmination of this sale, Secom now becomes a 60% stakeholder and TTC owning a 40 % holding of the Hospital. Secom and TTC earlier held a 50% stake.
According to Bangalore Mirror, Thursday saw Chairperson,Geetanjali Kirloskar and Director Kailasam Jayavelu, announced their resignations from their posts.
Sakra, which was launched on a 4 lac sqft site in the year 2013 on the outer Ring Road in Marathahalli was seen as an enormous opportunity in the health sector being a 310 bed speciality hospital. However, competition soon toughened as Narayana Health and Columbia Asia came up.
With Geetanjali Kirloskar at the helm of affairs this medical venture boasted of Kirloskar Engineering and Technology backing & Japanese Management. It was able to lure the cream of the medical profession with happy salary offers. The hospital’s main emphasis and attention lay in areas like neurosurgery, orthopaedics and cardiology, and various other departments being launched at various intervals, since 2014.
Though having done well professionally and financially ever since it came into existence, it also saw a few prominent and skilled hands leave.
Dr Arjun Srivatsa, former medical director of the hospital who was involved in the construction, told BM, “The talks of Kirloskar Group selling their shares were going on for some time now. The hospital was built with both Indian and Japanese nuances, and had seen almost four CEOs in two years.”
One of the super speciality doctors of the hospital said, “We had received information about purchase from the Japanese companies for some time now but the official announcement for the same was made only on Thursday. With this, it will be the completely owned Japanese hospital in India with 100 per cent Foreign Direct Investment (FDI). They have not announced any job cuts so far but only confirmed the change in management.”
Geetanjali Kirloskar , however, was unavailable for a comment . Mr. Shailender K Hooda,Institute of Studies in Industrial Development said a complete foreign direct investment could improve the quality of service even though it could mean high costs for a major section of the society.
Expressing a few reservations Mr. Hooda said that the middle income group due to an increase in salary structures had been raising a demand for quality healthcare primarily in the absence of a good government alternative.
Hooda, who has written a paper titled ‘Foreign Investment in Hospital Sector in India’, said, “In India, there has been a generic problem of low government spending in the healthcare sector because of which it does not meet international standards. In 2000, the government approved 100% FDI in any sector. In a hospital-based sector it could have certain long/term implications.”
He was of the opinion that investments, low wage rates and good behaviour of medical staff would also encourage medical tourism.
Addressing the problem of quality healthcare being provided to lower income groups, Mr Hooda added,”In India, a majority of hospitals, both corporate and charitable, do not provide healthcare at an affordable rate, Hooda said. “Around 75% of the population earn only about Rs 5,000 to Rs 10,000 per month. So foreign direct investment could also mean high costs which cannot be afforded given the socio-economic gap in Indian society, which would mean that it would serve only 10% of the society.”