Thyrocare board says no to founder Velumani’s offer to buy scanning arm

Nueclear Healthcare offers scans at half the market rate

Directors of diagnostic chain Thyrocare today said no to founder and chairman Arokiaswamy Velumani’s offer to buy out its latest venture aimed at democratising access to cancer diagnostic services.

At present, cancer screening and diagnostic services are extremely expensive, and Velumani — the son of a landless farmer — has been working for some time to make these services affordable for the masses, trying to repeat his strategy with Thyroid testing many years ago.

Nueclear Healthcare offers PET CT scans at half the price charged “anywhere else in India”. PET CT scans use functional imaging from PET and structural imaging from CT to create a single 3D image of the body.

However, the new venture has taken its own time to gain speed. This has led to some risk averse shareholders of the company expressing doubts about the viability of the business.

As a result, Velumani, who is passionate about making healthcare affordable, offered to take the business off the company’s hands and reimburse the company for all the investments made into the venture so far. In June, he offered to buy the arm for Rs 195 cr, based on the investments already made.

However, the company board decided to get a third-party opinion on the worth and prospects of the new unit.

In an update provided today, the Board of Directors of Thyrocare said they went through report prepared by Karvy Investory Services Ltd “and noted the long gestation period of this business in terms of returns”.

In other words, the board felt that it was unrealistic to expect quick returns from the venture and Thyrocare would be justified in giving the venture its own time to bear fruit.

Moreover, the board was also wary of losing Velumani’s focus.

“The [audit] committee also felt that accepting the offer of Dr Velumani may result in the dilution of his focus and time, which is not in the interest of the company.

“In view of the above, the audit committee had recommended that it is not expedient to accept the offer of Dr Velumani at this juncture. The board accepted the above recommendation of the audit committee,” the company said.

The move can be considered a reaffirmation of faith in the founder’s vision by the board.

Dr Velumani and his nominees were not part of the board deliberations, the company added.