Financial Times

The decision of Minister Rohitha Bogollagama to intervene in the matter of the ‘hostile’ takeover bid by Harry Jayawardane of Apollo Hospitals Ltd is highly praiseworthy.

It is a fundamental and world famous tenet of economics and business that all monopolies and monopolistic policies are unhealthy and never serve the interest of citizens within a democratic framework.

The problem is rooted in the fact that “too much power” concentrated in one set of hands eliminates healthy open market considerations.

In the well organized societies of the world there are efficient commissions and regulatory bodies that stand in the way of such ambitions. For instance, the current “mandatory offer” procedure would be – at first – subjected to scrutiny and maybe disallowed.

This prevents market and industrial disruption. Also, if there are any earlier court decisions in this sector against persons with take-over ambitions, they are automatically banned altogether from the share market scene. Investors are at enormous risk by these kinds of takeover bids. So are all corporate institutions.

The news that Mr. Harry Jayawardena has now set his sights on the hospital sector would have come as a surprise for many.

He already controls important sectors like banking, insurance, tea, plantations, communications, liquor, milk foods, dairy farming, tourism, shipping and airlines. All these are sectors critical to the country’s economy and every Sri Lankan citizen. In each of these sectors, Mr. Jayawardene always plays the dominant role thereby enabling him to fix prices, which is very bad in developing countries such as Sri Lanka where the majority still belongs to poorer segments and have no understanding of price fixing cartels. So far he has been able to get away with the backing of politicians and administrators.

By trying to take control of the hospital sector he is trying to enter a line of activity which can mean life or death to many. Until now Apollo Hospital offered an opportunity for even the poorer people to get specialist treatment without having to go abroad. With the change of ownership, this situation is bound to change as they will be more interested in short term profits not patients welfare. It will mean that the one window of opportunity available to patients who could not wait on waiting lists of government hospitals will be closed by this action.