The government’s project to expand Korean medical institutions overseas and attract foreign patients to Korea is drifting, despite the 5.9 billion won ($5.2 million) state investment in the past five years. The former Park Geun-hye administration initially pushed for the project.
The Korea Health Industry Development Institute (KHIDI) is now seeking to sell Korea Medical Holdings, a public-private joint firm established in 2013 to help Korea hospitals enter foreign countries and invite international patients to Korean hospitals.
During a parliamentary audit on the KHIDI on Tuesday, the ruling party and opposition party clashed over the issue of the KMH sale.
Lawmakers of the ruling Democratic Party demanded an audit on the KMH by the Board of Audit and Inspection, saying the company wasted away 5.9 billion won government investment.
However, those of the opposition Liberty Korea Party opposed the idea, claiming the Democratic Party was trying to stop the KMH project just because it originated from the former administration’s support.
According to Rep. Jung Choun-sook of the Democratic Party, KHIDI invested 200 million won in 2013, 150 million won in 2014, and 126 million in 2015, in KMH. The company additionally received 1.1 billion won private funding subsidy from the Ministry of Health and Welfare every year from 2013 to 2017, she said.
“Although the government poured a total of 5.4 billion won fund for the past five years, the KMH is on the verge of collapsing,” Jung said.
She went on to say that despite criticism from the then-opposition party and civic groups, the former Park administration allowed KHIDI to continue investing in KMH, and the health and welfare ministry to provide a private funding subsidy.
“As a member of the Health and Welfare Committee, I will request the BAI’s audit into the KHIDI’s investment in KMH in vain with taxpayer’s money, the health ministry’s subsidy support and the overall failure of the KMH business,” Jung said.
However, Rep. Yu Jae-jung of the Liberty Korea Party took an issue with the idea of discontinuing the ministry’s support “just because it was the former government’s project.”
“KMH is not a for-profit company. It was established to help companies and hospitals expand in overseas markets. We should not stop supporting the company just because the project was pushed by the former administration.”
Lee Young-chan, president of the KHIDI, said the institute decided to sell KMH because it was difficult to guarantee the company’s sustainability after five years.
According to the KHIDI’s evaluation on KMH’s asset value, the face value of KMH plummeted to 174 won per share as of June 30 from the initial 5,000 won.
The KHIDI’s board members decided to sell all or part of 168,202 shares in KMH to the Korea International Medical Association or private shareholders. The institute reported its sale plan to the health and welfare ministry on June 22 and has put KMH on sale.
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