How Labour’s Islington North Candidate Made Millions From NHS Privatisation

Praful Nargund is a healthcare profiteer.

by Steven Methven

3 July 2024

Praful Nargund, Labour’s candidate in Islington North. Design: Bronte Dow

Praful Nargund is Labour’s candidate in Islington North – the seat represented by former party leader Jeremy Corbyn for over 40 years. But despite running in such a high profile constituency, Nargund has given only a few media interviews, and has been criticised for “ducking out of local hustings” and “refusing to take questions” from constituents.

Amid a dearth of information, Novara Media has probed the financial affairs of the 33-year-old, and found that should he become an MP, he may be in a position to legislate on NHS privatisation while also benefiting from it. Our investigation also raises questions over the tax arrangements of Nargund and his family, as well as register of interest declarations made by Nargund in his role as Islington councillor.

Nargund is thought to have made millions through the sale of his family’s chains of private fertility clinics first to a US-Spanish healthcare conglomerate, and then to a US private equity firm. These clinics have contracts with NHS care boards across England, including the board which commissions services across five London boroughs – including the Islington constituency where Nargund is a councillor.

In selling the clinics, in which the NHS funds treatments for British patients, the Nargunds opened a direct route from UK taxpayers to the coffers of international private equity. For the first time, Novara Media can disclose an assessment of just how much the Labour candidate for Islington North was paid to create an international market in NHS fertility treatments.

A reproductive market.

In 2000, Nargund’s mother Geeta, a senior consultant gynaecologist at St George’s Hospital London, founded Create Fertility. Create Fertility would go on to offer a range of private IVF treatments, as well as egg-freezing and fertility tests. By 2015, Praful had become the managing director, and the business had expanded to eight clinics.

In 2017, the Nargunds founded a second chain of fertility clinics called abc IVF. Advertised as offering an “affordable IVF service”, the company’s 16 clinics across England and Wales also offered low-cost egg-freezing and egg-sharing services. Until last year, Praful was also its CEO.

In the intervening years and those that followed, the Nargunds constructed a complex corporate structure around Create Fertility. It was operated by a company called Create Health Ltd. That in turn was owned by a holding company called Create Health Holding, which was itself owned, for a while, by Create Health Global. Later, a further company – New Spring Holdings – was formed. With the exception of Create Health Ltd, Praful Nargund was a director of each.

Such a structure, in which companies are related by ownership, is called a group. Under UK tax law, companies in groups can obtain tax advantages: if one company is particularly profitable, it offset its tax burden against another in the group suffering losses. And Create Fertility was very profitable.

After all, the desire for reproductive healthcare in Britain is ripe for marketisation and commercial exploitation, as financially denuded NHS budgets means that in-house provision is scant. What’s more, the rise in those waiting until later in life to have children has created a boom in the number of women wishing to access fertility treatment, while the NHS has been left ill-equipped to develop its own services to fulfil these needs.

In 2021, the Nargunds sold their clinics to US-Spanish fertility giant IVI RMA Global – at the time the world’s largest provider of reproductive medical treatment – for an undisclosed sum.

In a sign of the high value placed on the fertility market by global capital, in 2023, IVI RMA was in turn acquired by KKR, a US-based global private equity and investment firm, for €3bn. As a result, KKR became the overarching owner of the Nargunds’ clinics. It also became the direct beneficiary of NHS outsourcing tariffs paid to Create Fertility clinics to provide treatment to NHS patients. KKR is no stranger to capitalising healthcare; its portfolio boasts a range of international holdings in the private healthcare field, including health insurance firms, pharmaceutical companies and private medical treatment providers.

Praful and Geeta Nargund, along with a family trust, profited both from the initial sale of Create Fertility to IVI RMA Global and the latter’s subsequent purchase by KKR. Praful appears to retain a financial interest in Create Fertility, even under the ownership of KKR. That means that were he to become Islington North’s new MP, Nargund would gain influence over such matters as fertility treatment regulation and further NHS funding to private reproductive medicine, all while potentially standing to benefit financially from that influence.

The proceeds of the sale by the Nargunds of Create Fertility to IVI RMA Global have never been disclosed. Nor have the proceeds received by the Nargunds of the later sale of IVI RMA to KKR. But calculations by Novara Media based on publicly available documents involving the several holding companies used to facilitate the sales indicate that the Nargunds could have profited the tune of £60m. As Praful’s share in the separate holding company which ultimately owned Create fertility was 12.5%, this suggests that he personally netted £7.5m.

According to the most recent records of yet another holding company, the Nargunds continue to own around 3.5% of the company, giving Praful a personal stake of around 0.5%. While that may initially seem insignificant, the business is worth many millions of pounds and operates in an area of private healthcare likely to grow exponentially in the coming years.

There is no suggestion that either Praful or Geeta Nargund have acted improperly in the structure of the sales of Create Fertility. Indeed, as recently as May, Praful – an Islington council member sitting on its Health, Wellbeing and Adult Social Care Scrutiny Committee – disclosed on the register of interests his shareholding in a “venture capital firm”. A detail not mentioned, however, was that through this company he indirectly holds a stake in his family’s former healthcare company, now owned almost outright by US private equity firm KKR.

Tax efficiencies.

Interestingly, in February 2023’s register of interests submission, he described that same company as a “Family Investment Company”, a technical term for a vehicle often used to limit the tax burden on the transfer of intergenerational wealth. But this year, with Nargund selected for high office by a party pledging to clamp down on tax loopholes, that term had disappeared from the register without any corresponding change to the structure of the company.

On the topic of tax, further examination of publicly filed accounts by Novara Media shows that the Nargunds appeared to excel at maximising tax efficiencies.

For example, Create Health Limited, which operated the Nargunds’ chains of clinics, appeared to pay no corporation tax in the year to December 2022, despite a turnover of £35.7m and £3.3m in profits. Was that tax offset – quite legally – by losses elsewhere in the group? Another company, Create Health Global, had suffered heavy losses previously. However, its voluntary liquidation in 2022 means that Novara Media can find no record of the tax offset there.

The absence of a record does not show wrongdoing on the part either of Create Health Limited, nor Praful Nargund. Nonetheless, upon the liquidation of Create Health Global, shareholders appear to have walked away with £37m, with Praful Nargund among the beneficiaries.

In another possible example of excellent tax planning, between 2015 and 2022, Create Health Limited also appears to have paid a total of £462,000 in rent to a partnership comprising Praful Nargund’s parents. For much of that period, they, along with Praful, were also the ultimate owners of Create Health Ltd. Company accounts show that Create Health offset these rental payments against its profits in order to lower its tax burden. Partnerships don’t pay corporation tax; instead, the partners pay tax as individuals on the partnership’s earnings. Novara Media has seen no evidence to suggest that the Nargunds failed ultimately to pay the tax that was due from this efficient arrangement.

Indeed, when Novara Media approached Nargund for comment, a Labour spokesperson said: “All tax that was due was paid” and that “all declarations of interests to Islington Council have been properly declared. Any suggestion that Mr Nargund has done anything wrong in relation to his financial disclosures or tax affairs is completely inaccurate.”

Labour hasn’t been shy about its ambitions for private investment in publicly-owned British infrastructure if it wins power, with reports of billions in private cash already lined up. And shadow health secretary Wes Streeting has let it be known that the private sector will play a major role in future NHS provision.

Praful Nargund’s willingness to open British healthcare to international capital and the extent to which he profited from it are facts that voters of Islington North deserve to know before they cast their votes. And combined with Labour’s fulsome support of the candidate in the constituency, they are also further indicators of what the party now values – and where it desires to go.

Steven Methven is a writer and researcher for Novara Media’s live YouTube show Novara Live.

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