(31 July 2008)

Dr Chai Patel, the serial healthcare entrepreneur, is to launch a comeback and has set up an acquisition vehicle called Court Cavendish to take advantage of opportunities in the healthcare sector. He recently confirmed that he has completed his first deal acquiring Care Management Group, a business that specialises in looking after patients with learning and mental-health problems. It has 700 beds and employs 1,250 staff. The business has debts of £140 million.

Lead bank, Dresdner, and Intermediate Capital Group, which provided mezzanine finance to cover the debts of £140 million, have agreed to hand over ownership to Patel. In return they will take warrants in the firm. Patel has managed several healthcare companies, including his first company, which was also called Court Cavendish, and the Priory Healthcare Group.

A controversial figure, Patel will be best remembered for exposing the Labour Party's 'Cash for Peerages' row. In March 2006 it was revealed that Patel, a Labour nominee for a Life peerage, had made a loan of £1.5m, at commercial rates, to the Labour Party in the summer of 2005. The House of Lords Appointments Commission, which vets nominations for peerages, is reported to have been against Patel's candidacy. Patel said he made the loan following a request, but never expected anything in return. The Labour Party defended the loan, asserting that no rules had been broken. Patel's name was submitted by Downing Street for a peerage two months after the loan.

The BBC quotes him as saying "[I have] been angered by what [I see] as the leaking of [my] candidacy by the commission" and he has called for greater transparency. He also said he would not have loaned the party the money if he had imagined that the financial support would create such criticism. Further concerned that his reputation was being traduced, he made a strenuous plea for clarity in the handling of his candidacy on BBC2's Newsnight on 10 March 2006 and in a letter to the HLAC stated he was mystified and deeply distressed by the apparent rejection.

On 15 March 2006 it was revealed that Jack Dromey, the Treasurer of the Labour Party, had been unaware of the loans and called for an independent inquiry. On March 29, 2006 Chai Patel withdrew his name from the list of nominees for a peerage. He said that at no time did he have any expectation of a reward nor had he been offered anything in return, yet on a BBC 'Today' programme he expressed the view that he wanted to serve in the upper house (The Lords) as he felt that his life experience ensured that he could make a valuable contribution there.

Dr. Chaitanya Patel CBE FRCP (born September 14, 1954) is a British doctor and businessman is the former Chief Executive of the Priory Healthcare group. Born in Uganda to Indian parents, he obtained medical qualifications at the University of Southampton in 1979 and previously worked in the NHS.

In 1988 he founded Court Cavendish, which was rapidly recognised as a high quality continuing care company. In 1996 he merged it with Takare to create Care First, the UK’s largest continuing care company. He remained as Chief Executive until it was taken over by BUPA in 1997.

In 1999 he acquired and became Chief Executive of Westminster Health Care plc, the largest publicly quoted healthcare services group in the UK, which acquired Priory Hospitals in 2000. After a management buyout of the Care Home division in 2002, Dr Patel continued as Chief Executive of Priory Healthcare, the UK’s largest independent specialist mental health and education services group.. On the 5th March 2007 Dr Patel and his management team resigned from Priory Healthcare.

Click here to read Management Today's interview with Chai Patel.