The sudden death of AM Arun, Founder of Vasan Healthcare, has put a question mark on the future of the world’s largest eye care hospital chain — Vasan Eye Care. Once a prized unicorn, valued at more than $1 billion, Vasan Healthcare was considered a successful company in Tamil Nadu for its stupendous growth in less than two decades.
However, the untimely death of Arun (police have now confirmed that it is a natural death) has come at a time when hopes of a revival have been growing with possible suitors, including a large eye care chain, showing interest in the group, which is now in the hands of the National Company Law Tribunal (NCLT).
It is learnt that operations at Vasan Eye Care have been showing good progress in the last few months. Vasan continues to operate around 100 centres, most of which have resumed business after the lockdown.
Growing claims
It may be recalled that in June this year, a batch of 10 unsecured financial creditors, presumably private financiers of Vasan Health Care, moved the NCLT seeking adjudication of their claims. According to Vasan Health Care’s list of financial creditors, the total outstanding claims to banks, financial institutions and asset reconstruction company Edelweiss is to the tune of ₹1,268 crore.
In 2017, NCLT Chennai ordered insolvency proceedings to be commenced against Vasan Healthcare based on a petition filed by one of its suppliers – Alcon Laboratories (India) Pvt Ltd.
Last October, a Division Bench of the Madras High Court allowed insolvency resolution for Vasan Healthcare. This was nearly two years after the proceedings were stayed by a single Judge order on whether insolvency and bankruptcy proceedings can continue in the wake of winding up procedure at the High Court.
However, insolvency resolution professional V Mahesh then moved the NCLT based on the High Court order, and obtained an order to revive the corporate insolvency resolution process.
Bumpy ride
Though Vasan Healthcare Group — the flagship company — was established in 1947, it came into prominence in 2002 when it set up the first eye care hospital in Tiruchi. Today, it has a network of 175+ super specialty eye care hospitals — claimed to be the world’s largest eye care provider. It has been a bumpy ride for Vasan Healthcare. There were allegations of forex violations and money laundering. The group was caught in raids by the Income Tax department and Enforcement Directorate.
The future of Vasan Health now lies with a possible suitor who would be willing to take over the eye care chain that still has a lot of goodwill among people, and has built a solid network over the last two decades.