‘Ducks and drakes’games at Lanka Hospitals
View(s):The Ministry of Public Enterprises in an unusual shake up, removed and then reappointed some directors at Lanka Hospitals Corporation PLC (LHCP) within a 5-day period, raising eyebrows.
Ministry officials told the Business Times that they ‘wanted to shake the board up a bit’, in move to purge the institution of its ‘lackadaisical’ attitude. On May 12, LHCP said in an announcement to the Colombo Stock Exchange (CSE) that independent executive directors have resigned from the board of the company with effect from May 9, 2017 namely Keith Damien Bernard, Hewakumanayakage Asendra Chaminda Siriwardena, Anil Abeywickrama, Ranathunge Arachchige Dona Umashanthiee Rajamantri, Nandana Jayantha Munasinghe, Menaka Dilani Samarawickrema Lokuhetty and Dr. Rohan Lalith Wijesundera.
On Tuesday the company announced that four out of these directors have been re-appointed to the LHCP board with effect from May 12 as Independent Executive Directors. They are Mr. Siriwardena, Dr. Abeywickrama, Ms. Rajamantri and Prof. Lokuhetty. Aruna Siriwardena is a new entrant at LHCP in the same capacity. Mr. Bernard, Mr. Munasinghe and Dr. Rohan have been removed and two more directors are to be appointed.
Questions are raised about how independent the directors are in a situation such as this, some market participants said. “These mass resignations and appointments suggest that these directors are not independent, but effectively nominees of major shareholders,” one analyst said.
Sri Lanka Insurance Corporation Ltd (SLIC) Life Fund has 29.54 per cent in LHCP and its General Fund owns 25 per cent. Fortis Global Healthcare Holdings Pte Ltd has 28 per cent. The Ministry of Public Enterprises has control of LHCP through SLIC as a State Owned Enterprise .
According to its last financial accounts, Lanka Hospitals reported a post-tax profit of Rs. 212 million in quarter ending March 31, 2017 against Rs.193 million in the same 2016 quarter while revenue in the same period was Rs.1.5 billion and Rs.1.38 billion, respectively.