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Monday, December 29, 2008

IJN's proposed takeover

There have been a lot of comments about the proposed takeover of IJN (National Heart Institute) by Sime Darby Bhd. Most of these comments were against the proposed takeover. In fact I had friends calling me asking me the rationale behind the proposal and if it is good or bad for the Rakyat.

First and foremost guys, I am not involved in any manner on the whole exercise. But I can only speculate and theorise.

IJN has made a name for itself. I read in the papers recently of the many achievements IJN has had throughout the years along with the selfless dedication of its staff to the members of the public. Apart from that, IJN has also done numerous charity operations and so on that had helped many members of the public, especially those who cannot afford the treatments.

IJN is also held in high esteem on the international scene. The Institute had done many researches and medical developments in the field of its expertise. These researches have brought many breakthroughs and new developments in the field of heart surgery and treatment.

The doctors, surgeons, nurses and all other medical / non-medical staff have also attained a high level of professionalism and efficiency. The IJN team is the epitome of medical service in Malaysia at the present moment.

All in all, Institut Jantung Negara is a success story and is recognized throughout the medical world.

Thus, for all the reasons stated above, I can understand why many oppose the proposed takeover.

So, what is it that Sime Darby Berhad can bring to the table for the proposed takeover? Why should the Government and we the Rakyat agree to such a takeover? If Sime cannot detail out their plans on how to value add without affecting the above plus points, then the proposed takeover should be aborted immediately. But having said that, I want to maintain an open mind and look from all angles. Thus, even if the proposed takeover is to proceed, I would like to see the following be addressed:-

i. The purchase price must be of proper valuation of IJN plus a high premium attached to it.
ii. Sime must give written monetary guarantee the amount (in RM value)of charitable treatments that they will allocate for patients who cannot afford treatment along with the conditions to apply for it. In so doing, IJN must also be transparent and always inform the public on its activities to help the rakyat.
iii. Sime must also ensure that enough funds are allocated for research and development in the medical field, specifically in heart surgeries and treatment. (This is one of the value adding that I see IJN and the nation can benefit from the takeover).
iv. Sime must ensure that all equipment be maintained at its highest standard.
v. Sime must also ensure that the level of expertise be maintained if not enhanced. (Another possible value adding).
vi. Sime must ensure that the team that is currently operating in IJN be maintained. Their salary, bonuses and so on must be maintained if not made better. This will ensure that the team remains intact even after any change in ownership.
vii. The Government must still hold what we call the Golden Share that would ensure all principle decisions must get Government approval. In this sense, the government can veto any moves to sell IJN to any third party of local / foreign interests. The first rights of refusal to purchase any of Sime’s shares must also be for the Government.
viii. The Government must also have a call option to buy back all of Sime’s interest in IJN at 70% below the takeover price should Sime fail on any of its written and agreed conditions. This is what I call a penalty clause to Sime.
ix. Sime must always maintain as a close Government Linked Company (GLC) through its shareholders and board of Directors.

Sime must also look at the proposed takeover not just from the profit making perspective, but as part of the company’s Corporate Social Responsibility (CSR) to the nation.

The proposed takeover, if it materialises, would directly do two things for the Government and Rakyat:-

i. Provide the Government extra funds from the proceeds of the takeover that it could allocate to other Rakyat projects. I believe the proposed price tag of the takeover must be substantial (hundreds of millions).
ii. Relief the Government of further allocation to operate IJN and allow it to reallocate the funds to other deserving rakyat centric initiatives.

Sime can be an integrated healthcare provider, with equity stakes in several other hospitals including IJN but all these conditions and more must be accepted and met. Or else, Sime and the Government, forget it.

1 comment:

Anonymous said...

What you say makes sense. It would help the nation and the people if there is money to be reallocated for them. The question is how to hold Sime to all their promises?