07/04/2011 - 00:00

Rift over waterfront hospital

07/04/2011 - 00:00


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THE two commercial arms of the Churches of Christ, led by Neale Fong and Barry Honey, have split over the future of Claremont’s Bethesda Hospital.

Rift over waterfront hospital

THE two commercial arms of the Churches of Christ, led by Neale Fong and Barry Honey, have split over the future of Claremont’s Bethesda Hospital.

Sitting high above the Swan River and with uninterrupted views over Freshwater Bay, Bethesda Hospital has an enviable and highly valuable location.

The future ownership of that property has become the subject of a commercial dispute between two not-for-profit businesses that shared common origins and until recently had worked closely together.

Bethesda Hospital Inc and nursing home operator The Bethanie Group Inc were both established by the Churches of Christ, and until last year had several common directors.

That changed when Bethesda chairman Neale Fong (formerly director general of the Health Department) and fellow director Ric Leaver resigned from the board of Bethanie.

At the same time, Bethanie directors Helen Drury and Jill Downie stepped down from the board of Bethesda.

The two organisations are now engaged in commercial negotiations, with Bethesda keen to buy back its property after effectively being bailed out by Bethanie three years ago.

Bethanie’s board, led by former KPMG partner Barry Honey, has engaged Azure Capital to help it with the negotiations.

The issue has caused some consternation among church members, with one telling WA Business News they were “appalled at this behaviour”.

Dr Fong was reluctant to discuss the issue but dismissed suggestions Bethesda was planning to take legal action.

“There are no legal disputes; we are in the process of establishing ownership,” Dr Fong told WA Business News.

The current issue stems from a major hospital upgrade that started in 2003.

Building company Doric was appointed to manage the upgrade, which was budgeted to cost $13.4 million but is believed to have cost a lot more.

Faced with higher costs, Bethesda ran into difficulties servicing its debt with Bankwest.

Dr Fong confirmed that Bethanie became the hospital’s financier.

Bethanie stepped in to take over the debt the hospital had,” he said.

“Some time later they took further security; they took title over the land and buildings.”

The property was leased back to Bethesda for a period of up to five years, and the hospital is now seeking to reverse the earlier refinancing.

“There has been an offer placed,” Dr Fong said.

Mr Honey declined to discuss the issue beyond telling WA Business News there has been an offer and a counter-offer.

Writing in Bethanie’s 2010 annual report, he said: “It was hoped, initially, that Bethanie and Bethesda might develop a coordinated business plan where the activities of each incorporated association are carried out in a complementary way.

“Unfortunately the two organisations have not been able to achieve this objective.”



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