Business Line: New Delhi: Friday, July 06, 2018.
The capital
market regulator SEBI has declined to share the report of an internal
investigation into alleged financial irregularities at Fortis Healthcare.
Responding to
an RTI filed by BusinessLine seeking details of the report of the internal
investigation conducted by law firm Luthra and Luthra, SEBI said sharing the
report with the public could harm the already beleaguered company’s interest.
SEBI’s reply
to the RTI stated, “Since the information sought is available to SEBI in
fiduciary capacity and includes commercial confidential information, the
disclosure of which could harm the competitive position of the entities, the
information sought is exempt under Sections 8(1)(d) and 8(1)(e) of RTI Act,
2005.” The investigation was initiated by the audit and risk management committee
of the company. It was completed on June 8 and eventually submitted to SEBI and
Serious Frauds Investigation Office (SFIO).
A closer look
at Section 8(1)(d) and 8(1)(e) of the RTI Act reveal that information sought
including commercial confidence, trade secrets or intellectual property, the
disclosure of which could harm the competitive position of a third party, is
exempt from RTI, unless the competent authority is satisfied that the larger
public interest warrants the disclosure of this information.
Surprisingly,
SEBI also believes that the disclosure of such information from the
investigation report that alleges siphoning ofup to Rs.445.03 crore, is not in
the larger public interest. Meanwhile, Fortis has been facing heat over massive
over-charging of patients since last year from various quarters, including the
National Pharmaceutical Pricing Authority (NPPA), which in its report stated
that overcharging of up to 1,737 per cent was visible in patient bills that
Fortis had processed when it came to paying for drugs and consumables. A
certain part of those bills was also under Price Control laws which Fortis had
blatantly flouted by jacking up maximum retail price (MRP) of drugs and
consumables.
In spite of
strong external headwinds, including highly-publicised patient-related
incidents, in one of which the family was charged up to Rs.16 lakh for 15 days
of admission, the top 10 hospital facilities such as Fortis Memorial Research
Institute (FMRI) in Gurugram, Shalimar Bagh (Delhi), BG Road (Bengaluru), Malar
(Chennai) and Amritsar continued to exhibit growth momentum in terms of
revenues, contributing 76.5 per cent to the hospital business revenue, Fortis
said. In fact, a look at the company’s numbers reveals that even after the NPPA
inquiry into FMRI’s repeated overcharging attempts, the company’s flagship
facility recorded revenues of Rs.513 crore in FY18, a growth of 6.5 per cent
over the previous year.
While the
company’s average revenue per occupied bed (ARPOB) increased to Rs.1.49 crore
in FY18, from Rs.1.45 crore in FY18, FMRI continues to have the highest ARPOB
in the company’s network of multi-specialty hospitals. FMRI’s ARPOB was Rs.2.85
crore in FY18, compared to Rs.2.74 crore in FY17.
“This indicates
that the healthcare costs for an average patient have hit the roof. Disclosure
of the report that investigates siphoning of funds is absolutely in public
interest,” said Leena Menghaney, Head, Access Campaign, Doctors Without
Borders.