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US: Some Tenet holders call for Katrina probe

Reuters
November 17th, 2005

A dissident shareholder group on Thursday called for a complete investigation into the deaths that occurred in Tenet Healthcare Corp.'s New Orleans hospitals after Hurricane Katrina.

The group, which holds about 30,000 shares and is led by persistent Tenet gadfly Dr. M. Lee Pearce, said it believes the future of the hospital operator "remains bleak."

Louisiana prosecutors, probing allegations of patient neglect and mercy killing after Hurricane Katrina, last month issued subpoenas for employees of one of Tenet's New Orleans hospitals, where 34 patients died during the hurricane.

Tenet, the struggling No. 2 hospital operator, has said it was cooperating with authorities.

The shareholder group called for a thorough investigation into what happened in New Orleans.

A Tenet spokesman dismissed the comments as the latest salvo in the Miami physician's long-standing feud with Tenet.

"Dr. Pearce is a chairman of a committee of one. He represents no financial interest other than his own. And for the last five years he has been campaigning against the best interests of shareholders," Tenet spokesman Steven Campanini said.

Tenet has charged that Pearce has tried to coerce the company into making a real estate deal.

Pearce, who founded North Ridge Medical Center, later sold it to a Tenet predecessor company, campaigned to replace Tenet directors in 2000 and started a campaign against Tenet once the chain's regulatory problems flared up in 2002.

Tenet's problems have included investigations about whether it overcharged Medicare, allegations of unnecessary heart surgeries at a Northern California hospital and an indictment against a Tenet hospital for violating rules involving physician recruitment.

Tom Potts, a spokesman for the shareholder group, said settlements have not changed the behavior of Tenet and that management needs to be held accountable.

"Since 1994, there have been eight or nine scandals and investigations. They never solve the problems. The scandals seem to continue and they're settling using shareholder money," he said.

Tenet shares, down about 42 percent since late August, were up 7 cents to $7.45 on the New York Stock Exchange around midday.



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