The worst is behind us now, says Vasan Eye Care’s AM Arun
Vasan’s founder on the past, present and future of the healthcare firm
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I was doing everything, thinking I was right. I had the energy to do it. I wasn’t listening to anybody.
The micromanagement helped to grow. I had direct connect with all vendors, my employees, my doctors, my landlords. It was my personal touch. Please understand, capital was not there for me to grow. The bankers trusted me because I was hands-on. It helped me to a large extent to grow. To manage the scale, it did not help. Please understand. So to sustain this scale, I am super confident this company will be much larger, brighter and more refined from everything that’s happened.
On the articles in ‘The New Indian Express’:
Whatever has come in press, it is all malicious. That’s why I have not even commented on that. It has no meaning. If somebody says that Sequoia’s money is routed through something then I don’t even want to respond. It is laughable. People have made irresponsible statements and I don’t want to answer to that.
On the transactions between his father-in-law and Advantage Strategic Consulting:
Price of a share is no yardstick for a private limited company. My father-in-law invested Rs.3 crore for 10% of the company. He received Rs.1.5 crore and offloaded 5%. We were a partnership company, made into a private limited company only to facilitate the private equity transaction. It looks like the transaction happened the next day but it was a private, pre-agreed transaction. The company was formed so we were doing everything together. It was already there, as proprietary, then partnership and then private limited company was formed.
On the price at which shares were alloted to his father-in-law:
Rs.100, but the quantum of money is important. He did not sell Rs.1.5 crore worth shares for Rs.50 lakh. Whatever price he bought, he sold. The important thing is tax. Did he pay capital gains tax? Yes. So where is the question of any wrongdoing?
On the obsession with growth:
See, the board empowered us to grow till 175 (centres). We and the investors had a mandate to go to 175. We grew to 190 and the reason was simple. I personally felt that four centres in Delhi was too low. Adding more would give more visibility. Adding more than 175 was my call.
On not listening to sound advice:
I learnt something new. And now it is not a question of bouncing back. I am already back. You will see what the company will be in the next three months. Statutory bodies, I will handle myself; I have done nothing wrong, I have the energy to handle it myself.
On lack of financial controls and the balance sheet problems:
The pressure of growth from 2012 to 2014 was so much on me that my focus was only on operations. Financial control, reporting, all this was not my focus at all. Expansion, growth in risky markets was my focus. 15 states, 100 centres in 24 months. It was too much pressure. To gain something, you have to lose something in life. I am not a 100-year-old company, I am a five-year-old company and in five years, 200 centres, 19 states, 130 cities, 8,000 employees, 600 doctors, 6 million customers, this is all real. Please give credit for some good thing that has happened.
The worst is behind us now. I will get back.
On putting his own money into the company, complicating financial records:
This goes back to passion, growth and lack of capital. I don’t want to blame anybody here. Everybody knew there was no capital and that I was putting my personal money. If it was a problem then someone (else) should have put capital then. I took all the decisions and stress myself. And I am happy with my decision. I live for my passion. For my company… I enjoy working. At such a young age of 47, I have gone through everything. I don’t regret anything. God has been so kind to me. I’m from a small town and my dream in life was to run pharmacies and make Rs.3 crore. That’s all. What I have been able to achieve, God has been very kind. I have a Rs.140 crore cash flow issue. And I will take care of it.
On transactions between him and the company:
Yes. Cash flow issue happened so I put in my own money. Is it wrong? If I would have got the money from somewhere else, I would not have. So I put in my own money. Is it wrong? Governance says it is wrong but if I had to put, I would my last penny in the business. And I did...
... In the process the area I failed in was delayed financial reporting. Not because of me but because of my expansion and cash flows. I was building in a market where everything was new. People don’t look at that side at all. Yes I put in my own money. To pay for expansion and to pay salaries to employees and to pay to banks. Is it wrong to pay banks from your own money? Bank gave me money on my face. They called me. I have offered all my properties to banks as collateral security. My money, my property, everything is this business. My life is this business. I know how I can get it back.
On his comeback plan:
We are downsizing 35 centres. Some are cannibalizing some centres and some are very expensive. I am not shutting down anything right now. My primary goal is to fill the cash flow gap. Get the financial reporting done. And then I will take a step back from finance. I am bringing in an independent person to do this. I don’t want to get involved in this. My focus will be back on operations and back to patient care...
One newspaper story cannot finish me off. Here’s the list of my properties that I have pledged to banks (hands over a list of properties with a value of Rs.315 crore). Publish it in the paper. The last property, including the house I live in, is pledged to banks. The last money I have in my bank account is for my company. This is my life. Give me three months.
On his connection with J.D. Group, the chit fund company:
My exposure in my transaction was only Rs.8 crore. Multiple chits, multiple transactions take place. We’ve been associated with them for the last five years. We’ve been friends. They run a chit company and they wanted me to subscribe. I did it as a favour. That is all that happened. The income-tax department knows about it, my exposure to this. Rs.8 crore is not a large sum, I don’t know where the Rs.200 crore figure has come from. This, I have challenged in income tax also. Chit owes in one year, five chits it becomes Rs.40 crore. Any point in time, my transaction was only Rs.8 crore. Peak transaction I am saying. We are friends and Rs.8 crore was not a big amount. So I subscribed to the chit. You subscribe for Rs.8 crore, pay Rs.20 lakhs a month for 20 months, you can take it out whenever you want. Somebody asks you as a friend and they are a big group, anytime you need money, make a phone call and they will come. A businessman does this.
On his relationship with Karti Chidambaram and allegations that Vasan was a conduit for black money:
Can a businessman not be friends with a politician? What’s wrong with that? Karti is a great friend.
P. Chidambaram is my father’s friend (Arun’s late father A. Murugiah was a Congress MP). And his son is my friend. We’ve been family friends for the last 40 years. As simple as that. Advantage was advising me in my business in the early days. Karthi told me that Advantage was his colleague’s company and would like to invest in Vasan. When they put money our revenue was only Rs.45 crore. Please understand. People think we gave them stake when Vasan was big. It was a very, very small company.
They thought it is a good company with a good entrepreneur, that he will build and grow the company. What’s wrong in that? In my lifetime, I have not benefitted or taken obligation from any politician in this country.
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