The firm in charge of a private hospital in New Malden has defended a “bizarre” move to put it in administration, even though it is making money and has plans to expand.

The New Victoria Hospital, in Coombe Lane West, which employs 250 medical staff and carries out some work for NHS Kingston, was put into administration on April 12 by its current owner, Anglo-Irish Bank.

Dr David Chubb, a partner of PriceWaterhouse-Coopers (PWC), claimed the business was “100 per cent solvent” and that administration was the best way to sell the hospital to new investors.

Dr Chubb said: “It is not the normal stuff but the fact is the current shareholders’ structure could not be support the hospital expanding and bringing in new investment.

“The administration process is just a mechanism and people should not confuse it with liquidation.”

A PWC spokesman said more than 50 companies had already expressed an interest, including private equity firms and wealthy individuals.

John Tribe, an insolvency expert from Kingston University, said putting a company into administration was a rare but potentially innovative approach to bringing in new investors, but was very expensive and should only be done as a last resort.

Mr Tribe said: “It just seems bizarre. If the business is viable, why they would use administration? Unless what they are selling is a newly structured company.

“Many believe there might be a conflict of interest in appointing an administrator who is already involved in the business. But on the other side, they will know the business very well and may be better placed to work in its interest.”

Dr Chubb denied there had been a conflict of interest in PWC being appointed the administrator, even though the firm had been employed as a business advisory consultant for the past 12 months.

The hospital, which has an annual turnover of more than £13m, reported an annual profit of £96,000 up to April 2009, after making a loss of £1.2m in the previous 12 months.

In March, Anglo-Irish Bank reported huge losses of 12.7bn Euros since December 2008 due to toxic property loans and needed an emergency bailout package of 10.44bn euros from the Irish Government.

Charles Hutton, New Victoria Hospital’s chief executive, is currently on annual leave and was unavailable for comment.