New Delhi: The Chhattisgarh government’s decision to acquire a cash-strapped private medical college in the state, via a law, has raised questions of conflict of interest. Although the government says it is in the “public interest” to come to the aid of students who are studying there, the college, however, is owned by the family into which chief minister Bhupesh Baghel’s daughter is married, the Indian Express has reported.
Officials in the government are currently working on a bill to facilitate the takeover by the Baghel government. The bill to takeover Chandulal Chandrakar Memorial Medical College is to be presented in the upcoming state assembly session. The college is owned by Chandulal Chandrakar Memorial Hospital (CCMH), an unlisted private company, registered in March 1997.
Although work is underway on the draft bill, a section of bureaucrats, according to Indian Express, are uncomfortable with the government’s move. They point out that Baghel’s daughter, Divya Baghel, is married to Kshitij Chandrakar, whose father Vijay Chandrakar is the younger brother of Mangal Prasad Chandrakar, the director of CCMH. Mangal Prasad Chandrakar holds 4% of shares and is among 59 shareholders of the hospital.
The draft bill states that the government wants to acquire the college as it is in “financial difficulties”. In the ‘Statement of Object and Reasons’, the bill notes that many students are studying in the medical college, and the state government is satisfied that an “immediate acquisition” is “necessary in public interest”. A special officer, proposed to be appointed, will get a year to submit the valuation of the college’s properties to the government.
After the valuation exercise to assess the movable and immovable assets of the college, the government will pay a requisite amount to the college management for acquisition. The draft bill clearly states that the liabilities of the college will be that of the owners of CCMH. The debt of the medical college shall remain the liability of the owner “before the vesting by the Government and can be recovered by their creditors from them by following normal process of law”.
The government’s decision to take over the medical college comes six months after Baghel announced it. “The work to acquire the private hospital under the government will start soon,” Baghel had tweeted on February 2.
Those bureaucrats who are uncomfortable with the acquisition point out three reasons as to why the government should reconsider its decision.
One, the CCMH’s total outstanding debt is Rs 125 crore, of which a large part is unsecured. Two, the medical college was accused of resorting to “fraudulent activities” by the Medical Council of India, the apex body which recognises and oversees medical education in the country, in its meeting on April 12, 2018. Three, the college does not have recognition since 2017.
However, despite the above reasons, the government still wants to go ahead with its decision. “The Bill is going to be presented in this session of Assembly. Until it is presented, no questions about the Bill or its circumstances could be provided by the concerned secretary,” said S. Bharatidasan, director of public relations of the Chhattisgarh government, when asked about the acquisition and the bill.
Baghel’s son-in-law, Kshitij Chandrakar, who heads the All India Professional Congress unit in the state, says that although Mangal Prasad Chandrakar is his uncle, his father and his uncle had separated amicably six to seven years ago, pointing out that he does not have any connection with the medical college.
However, he favoured the government’s decision citing the future of “300-odd” students studying there. “If the government is getting a functional college at a price much less than what they would pay to build a new college, while also helping out the students, it is a good and welcome decision,” he said.
Laxman Chandrakar, executive director, CCMH, and also a shareholder (3.75%) said the college management never hid the fact that it had debts, but they requested the government to save the college. On the other hand, Devkumar Chandrakar, who is also an executive director, CCMH, and a shareholder (3.75%) confirmed that the college does not have recognition from the Medical Council of India from 2017.
However, not everybody from Chandulal Chandrakar family is in favour of the decision. “The chief minister is trying to benefit his (daughter’s) in-laws by making a new law,” Amit Chandraker, the grandson of Chandulal Chandrakar’s elder brother Chunnilal Chandrakar, and joint secretary, state Congress, alleged.
According to financial statements for 2019-20 obtained from the Registrar of Companies, CCMH reported a turnover of Rs 49.67 crore in 2019-20, 26% less than Rs 67.38 crore in the previous year. With the company’s net worth fully eroded, it reported losses of Rs 9.98 crore in 2019-20, higher than losses of Rs 8.55 crore in the previous year.
On the other hand, the company’s total debt for the year ended on March 31, 2020, stood at Rs 125.26 crore, of which unsecured loans accounted for almost 43% or Rs 53.81 crore.
The medical college and hospital were named after Chandulal Chandrakar, who was a Congress leader and had been a five-term Lok Sabha MP from Durg. He had also served as a Union minister. He died in 1995. The hospital was promoted in his memory by the Chandrakar community.