Under-reporting of debt
In December 2019, short-seller Muddy Waters questioned the company's statement of accounts, concerned that NMC had "manipulated its balance sheet to understate debt" and contained statements which were "hallmarks of significant fraud".[22][23]
In February 2020, Executive Vice Chairman Khalifa Butti Omeir Bin Yousef resigned from NMC. The company said a legal review was being undertaken to verify the total interests of some of its shareholders over concerns they have been incorrectly reported.[24] Later in the month shares in the company were suspended from trading amid concerns that debt had been under-reported: the Financial Conduct Authority (FCA) announced an investigation.[25]
Also in February 2020, as per the regulatory fillings to the London Stock Exchange, the company disclosed about the "highly preliminary approaches" made by the private equity groups Kohlberg Kravis Roberts and Switzerland-based GK Investment for possible buyout.[26][27][28] However, Kohlberg Kravis Roberts withdrew by 11 February 2020,[29] and GK Investment withdrew by the end of February.[30]
In March 2020 the company reported that:[3][31] This meant that the actual indebtedness was not $2.1 billion as previously reported but circa $5 billion as at 30 June 2019.[32] On 24 March 2020 the total debt was then estimated at $6.6 billion.[33] Many employees were not paid at that time.[34]
On 8 April 2020, NMC went into administration in the UK due to the insolvency of the company due to alleged frauds committed by founder and then-chairman of the board B.R. Shetty.[35] Consequent to the request from the board of directors of NMC and on going investigation of potential financial irregularities, the company was suspended from its listing on the London Stock Exchange.[36]
On 15 April 2020, Abu Dhabi Commercial Bank filed a criminal complaint against NMC Health with the Attorney General's Office of UAE.[37] In May 2020, NMC Health filed for Chapter 15 bankruptcy in the United States, allowing administrators to "maximize the value of assets owned in the U.S."[38]
In December 2020, Shetty sold the company for $1 to an Israeli-UAE consortium.[39]
In April 2021, HSBC and Standard Chartered cleared around $370M worth of positions in NMC's debt in two separate auctions as more information about likely restructuring recoveries become available.[40]
In 2023 the UK FCA censured the company for committing market abuse by understating its debts by as much as $4bn. No fine was issued as the business was not expected to have any funds left after paying debts.[41]
- it has identified over $2.7 billion in facilities that had previously not been disclosed to or approved by the Board ... The Board believes that some proceeds may have been utilised for non-Group purposes.
