Indian medical tourism industry to touch $8 billion by 2020: Grant Thornton

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According to a CII – Grant Thornton white paper, cost is a major driver for nearly 80 per cent of medical tourists across the globe.

As healthcare turns costlier in developed countries, India’s medical tourism market is expected to more than double in size from USD 3 billion at present to around USD 8 billion by 2020, a report says.

According to a CII – Grant Thornton white paper, cost is a major driver for nearly 80 per cent of medical tourists across the globe. The cost-consciousness factor and availability of accredited facilities have led to emergence of several global medical tourism corridors – Singapore, Thailand, India, Malaysia, Taiwan, Mexico and Costa Rica.

“Amongst these corridors of health, India has the second largest number of accredited facilities (after Thailand). The Indian Medical Tourism market is expected to grow from its current size of USD 3 billion to USD 7-8 billion by 2020,” Grant Thornton India’s National Managing Partner Vishesh C Chandiok said.

Bangladesh and Afghanistan dominate the Indian Medical Value Travel (MVT) with 34 per cent share.

Africa, GCC and CIS regions (whose current share is just 30 per cent) present the maximum possible opportunity for the Indian healthcare sector. Medical tourists from these sectors currently favour the South East Asian medical corridors.

Chennai, Mumbai, AP and NCR are the most favoured medical tourism destinations for the floating medical population who avail treatments in India.

“While the number of MVTs itself is poised to grow at over 20 per cent CAGR, Kerala needs to focus on its visibility as a healthcare destination amongst other states,” said the report.

Kerala attracts only 5 per cent of such medical tourists currently and has the potential to increase its share to a 10-12 per cent with a focused marketing strategy.

As per the study, the key factor to drive medical value tourism in Kerala will be availability of national as well as globally accredited facilities across the entire state, an area where Kerala lags behind in comparison to Tamil Nadu, Maharashtra, NCR and Andhra Pradesh.

“… Kerala is already one of the most preferred tourist destinations in the country. For medical value tourism, however, there is a clear need to build and upgrade infrastructure,” Grant Thornton India Partner Vrinda Mathur said.

The white paper suggests tapping a larger share of the health wallet of the African, Asian, Middle East patients as well as welcoming tourists from other regions and countries, as also a marketing campaign with active support of the government and private sector.

Source: http://health.economictimes.indiatimes.com/news/industry/indian-medical-tourism-industry-to-touch-8-billion-by-2020-grant-thornton/49618595

Mallya default singes top auditing companies

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Some of world’s top auditing firms, including Price Waterhouse, Grant Thornton, Deloitte LLP and Walker Chandiok & Co, are under scrutiny with a slew of regulators seeking answers on their valuation, auditing and due diligence of UB Group companies over the last few years.

Deloitte LLP conducted the financial and tax due diligence for Diageo of United Spirits Ltd (USL) which led to the $2.1 billion acquisition of the company, but could not detect the problems in annual accounts. These accounts, in turn, were prepared by PW, which was the auditor for USL between 2010 and 2011, and later by Walker & Chandiok & Co.

The accounts were disputed by Diageo in April 2015 after it found a Rs 2,100 crore hole and sought Vijay Mallya’s ouster from the USL board. Questions have also been raised by lenders on what basis Grant Thornton valued the Kingfisher brand at Rs 4,100 crore. This is now being probed by the Serious Fraud Investigation office (SFIO).

When contacted, a Grant Thornton spokesperson said the firm fully stood by its brand valuation report on Kingfisher. “We believe it was appropriate in the context of when it was done and the purpose for which it was done,” the spokesperson said.

PW declined comment but an external spokesperson said the firm had not received any communication from either the Securities and Exchange Board of India or the Enforcement Directorate. “Deloitte does not comment on client confidential matters,” its spokesperson said.

Diageo had invested in USL after the British company was given express representations that all of the receivables from Mallya entities were recoverable in full. The fund diversion worth Rs 2,100 crore from USL was later raised when KPMG, the new auditor appointed by Diageo, discovered discrepancies when it was finalising USL’s 2014 accounts. All the three years’ accounts will now have to be re-stated, according to listing norms.

In the same year, the new USL management called in PW UK for a forensic audit of the previous three years (which included auditing by its own India unit) and passed on the reports to the regulators including the Sebi, the ministry of corporate affairs and the Institute of Chartered Accountants of India.

The ICAI, sources said, had asked both PW and Walker Chandiok to explain the discrepancy. An ED official said it was surprising that none of the auditors or valuers for Diageo raised flags over the accounts manipulation or the Rs 4,000 crore diversion by USL to the British Virgin Islands in 2007.

While the auditors of USL are in the dock for cooking accounts, another marquee auditing firm — Grant Thornton is under investigation by the SFIO for its Rs 4,100 crore brand valuation of Kingfisher Airlines. It was based on this brand valuation in 2011 that Mallya raised Rs 9,100 crore from government-owned banks by offering the brand as collateral. The lenders are now holding a dud Kingfisher brand, which is finding no takers.

Sources in the ICAI said it was a redux of the Satyam scam, when some of the world’s top auditors overvalued assets before the Maytas and Satyam merger, which led to the unravelling of the scam. In the Satyam case, the ICAI had debarred two auditors from Price Waterhouse who were found guilty of professional misconduct. S Gopalakrishnan and T Srinivas were struck off the ICAI’s rolls and fined Rs 5 lakh each. A Central Bureau of Investigation court later convicted them of fraud.

Source: http://www.business-standard.com/article/current-affairs/mallya-default-singes-top-auditing-companies-116031900495_1.html

CBEC for voluntary code for e-retailers to curb illicit trade

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Expressing concern over sale of fake products on e-commerce platform, CEBC today said it is considering putting in place a voluntary code of practice for e-retailers to curb illicit trade.
“New challenges are emerging for customs. E-commerce is one such major area of vulnerability. E-commerce in India provides an unparalleled platform for sellers of both genuine and counterfeit products. So, we are looking at possibility of introducing voluntary code of practice for e-retailers,” Central Board of Excise and Customs (CBEC) Chairman Najib Shah said at an event organised by Ficci here.
The easy concealment of identity encourages sale of counterfeit products on the e-commerce platform. At times, intermediaries are denied judicial protection in the absence of strong law, he said.
To address the challenges posed by e-commerce trade, Shah said CBEC will at a seminar next month discuss with stakeholders the possibility of introducing ‘voluntary code of practice’ for e-retailers to fight illicit trade.
Stating that any smuggling and counterfeit activities is a matter of great concern to the government, the CBEC chief said, “This game is done at the cost of the honest tax payers. Though it results in financial gain to the person infringing the law but it is a financial loss to the exchequer.”
Shah also emphasised on the intellectual property rights and called for structured interaction between the customs and stakeholders on this issue.
The latest report, ‘Emerging challenges to legitimate business in the border-less world’, prepared by tax and advisory firm Grant Thornton and industry body Ficci, also noted that online marketplaces have become a “preferred hub for illicit operations” owing to their wider reach and ease of access.
Prominent players including Alibaba, Amazon and SnapDeal, etc have been at the receiving end of imitation products offered by third parties not connected to the brand owner, the report said and suggested e-retailers to put in place an holistic anti-counterfeit policy.
That apart, the report also pitched for a separate e- commerce law in the country to check illicit trade.
“In the absence of a specific e-commerce legislature in India and other laws including the Information Technology Act, Indian Companies Act, Companies Act 2013, Intellectual property, laws in copyrights and trademark etc, there are certain grey areas. Thus, there is a need for a separate e- commerce law in the country,” the report said.
The e-commerce regulations have a long way to go in India and inching closely towards this journey is the recent proposal of the Consumer Affairs Ministry to bring e-commerce businesses under the purview of multiple government agencies, the report added.
The report was released here by Food and Consumer Affairs Minister Ram Vilas Paswan. (PTI)

Source: http://www.dailyexcelsior.com/cbec-for-voluntary-code-for-e-retailers-to-curb-illicit-trade/

Government to set up new agency to probe corporate accounting frauds

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The government will soon set up a specialised agency to investigate large corporate accounting frauds. It is keen to establish a robust mechanism for faster inquiries into scams such as the one at Satyam Computer Services, which overstated earnings for several years under a previous management.

The proposed agency is likely to examine accounting frauds of certain classes of listed companies or those of Rs 500 crore and more.

To be formed under the Companies Act provisions, the agency will be mandated to investigate auditing and accounting frauds, either suo motu or on referral by the Centre.

 

“The threshold for accounting frauds to be probed by the upcoming agency is likely to be Rs 500 crore and above. It could also probe frauds of certain classes of listed companies,” said a senior government official. “Currently, there’s a lack of specialisation required to probe complex accounting frauds. The agency will ensure swifter probes.”
First suggested in the aftermath of the Satyam fraud, in which the auditor was also implicated, the upcoming agency will have an overarching role to regulate chartered accountants as well as set standards. It will have forensic auditors on its panel as well.

At present, the Institute of Chartered Accountants of India (ICAI) has authority to investigate and take disciplinary action in cases in which an auditor is involved. Any fraud below the threshold set by the government could still be investigated by the professional association.

ICAI has requested the corporate affairs ministry to not dilute its authority. If the government is keen on setting up an authority, ICAI has suggested that this look at high-value accounting scams above a threshold of Rs 1,000 crore.
“We have made a representation to the government that ICAI’s mandate should not be diluted and authority to initiate probe and take disciplinary action against auditors should rest with the institute,” ICAI president Manoj Fadnis told ET.

In recent years, ICAI has probed auditors of companies such as Reebok, Sesa Goa, Satyam and the Saradha Group among others. These inquiries followed references sent by the Serious Fraud Investigation Office (SFIO).
“The agency will strengthen the government’s mechanism and will ensure faster enquires into accounting frauds. For the auditing profession as well, it will be a very positive step as the agency will oversee quality of profession,” said Lalit Kumar, partner at J Sagar Associates. “But the government also has to ensure that ICAI’s mandate is not diluted.”

A recent study by Assocham and Grant Thornton India said there was a 45 per cent increase in Indian corporate fraud in the past two years. The proposed agency will have powers to penalise audit firms in case they are found guilty of misconduct. Penalty could also include the disbarment of such audit firms.

The agency will also be solely in charge of setting up and revising accounting standards and will have professionals from industry and several government bodies on its panel. “The agency will make recommendations on formulation and laying down of accounting and auditing standards for companies,” a senior government official told ET. “It will also monitor and enforce compliance and oversee quality of service of professionals in the industry.”

ET VIEW

No Duplication Please, Overhaul SFIO

Duplication makes no sense. India already has a specialised agency, the Serious Fraud Investigation Office (SFIO) to do cutting-edge investigation on financial frauds. The Institute of Chartered Accounts of India, on its part, can take disciplinary action against errant auditors. True, the SFIO’s functioning has been dismal so far, and what is needed is to transform the agency to take on new and complex probes. It should hire professionals laterally including cyber security experts, forensic auditors and tap the best talent from other investigating agencies. Ideally, it should draw together a team depending on the case. But to attract the best talent, it also needs to pay market-linked salaries.

Source: http://economictimes.indiatimes.com/articleshow/49927368.cms