IHH Healthcare chief Kelvin Loh’s surprise resignation follows slew of boardroom changes

THE surprise departure of IHH Healthcare’s head honcho Dr Kelvin Loh comes on the back of a string of boardroom changes at one of the world’s largest private healthcare behemoths. The 49-year-old healthcare veteran was also believed to have been on leave since early January before his “voluntary resignation”, according to sources.

The news of the immediate resignation of the company’s managing director and chief executive officer took the market by surprise on Wednesday (Feb 22) evening.

IHH, one of the world’s largest private healthcare operators, is dual-listed in Malaysia and Singapore, and has a market value of nearly S$16 billion.

The reason for Dr Loh’s long leave prior to his resignation could not be ascertained. The Business Times’ queries to the company on the matter did not draw further comment. 

On boardroom changes, the sector heavyweight replied “no” to the question of whether there was a disagreement between Dr Loh and the company’s board; asked whether there were matters that needed to be brought to shareholders’ attention, the answer was also “no”.

BT further understands that IHH carried out an internal inquiry in relation to some “governance matters”, but the exact nature of the probe is not known. The company did not respond to BT queries on the matter.

IHH, which counts Japan’s Mitsui & Co as its single largest shareholder, followed by Malaysia’s sovereign wealth fund Khazanah Nasional, has yet to fill its top executive post. This in itself could suggest that Dr Loh’s departure was a sudden move.

When he took over the reins from IHH’s long-serving boss Tan See Leng (now Singapore’s Manpower Minister and Second Minister for Trade and Industry) three years ago, his appointment as chief executive-designate and executive director had taken place some six months before that.

Dr Tan’s departure from IHH was announced months ahead of the expiry of his employment contract, in what appeared to set in motion a smooth succession and clarity in top leadership.

Following Wednesday’s announcement, there is a vacuum in IHH’s top seat at a time when the healthcare giant with an appetite for buyouts is seeing an uptick in patient volumes and bed occupancy rates in this post-pandemic era – even as it faces headwinds from rising operating costs and nursing shortages.

IHH shares finished lower by S$0.040 or 2.19 per cent at S$1.79 on Thursday. The healthcare firm boasts sizeable operations in several key markets, chiefly Singapore, Malaysia, Turkey and India. This includes 82 hospitals in 10 countries and 15,000 licensed beds. For the nine months ended September 2022, IHH earned a net profit of RM1.4 billion (S$422.9 million) on the back of RM13 billion revenue.

On Thursday, IHH issued a statement that it had accepted Dr Loh’s resignation and appointed group chief operating officer Joe Sim to take over Dr Loh’s duties. “Dr Loh has decided to step down after more than three years at the helm. The board has begun the search for a potential successor ... In the interim, it is working closely with Sim and the rest of the IHH management team to ensure a seamless transition,” it said.

Interestingly, since late last month, IHH has had a slew of boardroom changes. The most significant of these changes involved the resignation of Takeshi Saito as IHH’s non-independent and non-executive director on Jan 27.

According to IHH’s announcement, Saito’s departure followed his resignation as nominee director of MBK Healthcare Management (MHM). Wholly owned by Mitsui & Co, MHM is IHH’s major shareholder with a 32.8 per cent stake. Saito continues to serve as chief executive of MHM, which is based in Singapore and manages the healthcare assets of Mitsui’s portfolio.

Saito, like Dr Loh, is a healthcare veteran. He is also a Mitsui long-timer, and in fact led the Japanese giant’s original RM3.3 billion investment in IHH back in 2011. Seven years later, Mitsui would pick up a bigger chunk of IHH from Khazanah as the Malaysian state-investment firm was rejigging its portfolio. With that, it deposed Khazanah as IHH’s largest shareholder.

“As one of the biggest private hospital groups in Asia, IHH Healthcare is set to serve as the foundation of Mitsui’s Asia-wide healthcare infrastructure. And it all started from the passion of one man: Takeshi Saito,” said Mitsui on its website under “People”.