GII
29 April 2020
PANKAJ SHARMA
Rahul Gandhi tweeted at 1.22 PM on Monday,
27 April 2020 an article published by Business Today exposing 145% profiteering
in coronavirus rapid test kits sold to Indian Council of Medical Research
(ICMR) and said “That any human being would try and profiteer from the
immeasurable suffering of millions of his brothers and sisters, is beyond belief
and comprehension. This scam is an insult to every Indian. I urge the PM to act
swiftly to bring the corrupt to justice”.
SARS CoV-2 Antibody test kits are
being imported from China's Wondfo Biotech by India’s Matrix Labs. The original
price of the kits is US $ 3 per test. Its landed price, including air freight of
Rs 20 to importer is Rs 245 per test. Matrix Labs sold it to distributor Rare
Metabolics Life Sciences at Rs 400 per test, charging a profit of Rs 155 per
test. The distributor kept a profit of Rs 200 per test in its pocket and supplied
the kits to ICMR for Rs 600 each. ICMR placed an order to buy 5 lakh kits on
March 27 at Rs 600 plus GST per test.
Rare Metabolics delivered 2.76 lakh kits to
ICMR; remaining 2.24 lakh are facing a payment dispute. Rare Metabolics intends
to sell 1 million kits; order was placed with Matrix for 5 lakh kits. Matrix
Labs has an order to supply 50,000 kits to Tamil Nadu also through dealer Shan
Biotech and Diagnostics at Rs 600 per test. Of this, 24,000 have already been
supplied; 26,000 more are yet to be delivered.
A legal dispute in Delhi High Court
between the distributor and importer unearthed massive profiteering and
over-pricing in kits sold to ICMR. Observing that 61 per cent mark-up on such
test kits is on the "higher side" but "more than
sufficient", the Delhi High Court single bench of Justice Najmi Waziri
disallowed a 145% mark-up from landed price of Rs 245 to ICMR's purchase price
of Rs 600 per test. Instead, Justice Waziri slashed price for every kit by 33
per cent from Rs 600 to Rs 400 per test. The order was against a petition by
Rare Metabolics, the sole distributor of test kits imported by Matrix Labs.
The dispute was over release of the
remaining 2.24 lakh kits--of the 5 lakh imported from China--to be sent to
ICMR. Importer Matrix Labs had argued that it had only been paid Rs 12.25 crore
of the Rs Rs 21 crore import. As per the agreement, the balance amount of Rs.
8.25 crores had to be first paid to the importer before any monies received
from ICMR. Rare Metabolics filed a petition before the Delhi High Court seeking
release of the remaining 2.24 lakh test kits so that they can be supplied to
ICMR as per the agreement. The petitioner argued that under its bi-partite
agreement with Matrix Labs, no other company can market them in India. The
company also said that it has already paid Rs 12.75 crore, which cover the
freight cost for 5 lakh test kits. Rare Metabolics assured that payment due to
Matrix Labs will be remitted as soon as it is received.
Dispute arose after Matrix Labs demanded
upfront payment, whereas the petitioner maintained that the payment could only
be made after ICMR released the funds. The petitioner informed the court that
the consignment of 2.76 lakh rapid antibody tests has already been supplied to
ICMR for which payment is still awaited. This payment will be made after the
tests meet ICMR's standards. ICMR has put the rapid tests on hold after
detecting faulty results from the Wondo kits. The Chinese firm has denied that the
kits are faulty.
The importing outfit Matrix Labs is
located at Chennai’s Lakshmikanthammal Street, Mahalakshmi Nagar, Rajiv Nagar,
Poonamallee. The firm was established in 2012 and claims to be a leading
In-Vitro diagnostic company, offering Immunology, Microbiology services in
India. It also asserts that it’s most lead generating products are Covid-19
detection test kit, Optical Coagulation Analyzer (OCG-102), H-8 Haemoglobin
Analyzer, Finecare FIA Meter, i15 Blood Analyzer and fully automated feces analyzer.
Matrix Labs currently employs only around 50 employees. One Suresh is the Chief
Executive of this firm.
One Suresh is also the director of Chennai
based Matrix Labs Private Limited which is owned with him by another 4 persons.
They are Seyed Ahamed, Revannath Bhujangrao Patil, Kulandaivel Padmanathan and
Benny Joseph. This company was incorporated about six and a half years back, nearly
one and a half year after the Matrix firm, in January 2014 with an authorized
share capital of only Rs. Five lac and an equal paid up capital of similar
amount. The company is involved in Manufacture of medical appliances and instruments
and appliances for measuring, checking, testing, navigating and other purposes
except optical instruments. The office of Matrix Labs is at 7, Srinivas Nagar,
Main Road, Bhaggiyathammal Nagar, Moggappair, Padi, Chennai.
The distributing outfit Rare Metabolics
Life-sciences Private Limited is based at New Delhi. It is owned by one Kripa Shankar
Gupta and Shobha Data. The company was formed in May 2015 with only Rs One Lac
as its authorised capital and Rs One Lac as paid up share capital. Manufacture
of basic chemicals is the primary job of this company. The office of the
distributing company is at B-8, Bandhu Vihar Apartments, Plot 11 in Sector 10
of Dwarka.
It would be interesting to know that why
Kripa Shankar Gupta’s company was appointed the sole distributor for Indian
territory to supply the testing kits? Gupta is equipped with a degree of MD in Pharmacology.
He claims to have over 15 years of experience with in-depth understanding of
Indian pharmaceutical and healthcare System. He has been working for some
multinationals for the access of their new drugs to India.
Gupta has ventured into dental field also
by establishing rare dentistry to bring the CBCT machines. He also established
the advanced CAD /CAM centre for dentistry in North India. Gupta loves to call
himself ‘a passionate Medi-preneur with deep understanding of Indian health
landscape and ability to innovate new health programs in public and private
health’. He co-owns Pegasys Life Sciences Private Limited with one Akhilesh Raj
Rastogi. This company has its office in the outskirts of National Capital
Region’s (NCR) Indirapuram, which is technically in Ghaziabad, Uttar Pradesh.
C-437, Gaur Green Avenue, Abhaykhand-2 is the headquarters of this company
which is established with an authorised share capital of Rs One Lac and an
equal paid up capital.
Now one very underlining fact about the
Chinese company which is the primary source of the imports of these testing
kits. Shares of this Guangzhou based company—Wondfo Biotech have gained more
than 40% this year after corona pandemic began in Wuhan. Ms. Wang Jihua is the
chairman of Wondfo. Her husband Li Wenmei is the president of the company.
Wondfo was founded 28 years back, in 1992. Li only has an undergraduate degree
from Jilin University. He has an important place on the board of China
Narcotics Control Foundation. He is also associated with South China University
of Technology.
Li and Wang both have attained the age of
58 and control the assets worth billions of dollars. Their company Wondfo owns one overseas lab in
San Diego with one branch in Chicago. It has another eleven overseas offices
with sales network in more than 120 countries with around 2500 employees. There
function 42 companies under the corporate umbrella of Wonfo Biotech Company Limited.
It is yet to be seen that what steps the
government will take against the plunderers involved in the supply of testing
kits.
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