According to a market observer, it could be considered the largest fraud in modern history which caused a major economic shock in the Emirates.
SoDATA — The main lenders to UAE’s embattled NMC Health are reportedly setting up a coordinating committee, taking a major step toward restructuring the hospital operator’s $6.6 billion debt as it was in no position to pay it off.
The Abu Dhabi based NMC Health was placed under the UK court’s supervision last week which appointed administrators to oversee the whole management and operations of the UAE’s largest healthcare operator — after succumbing to creditor demands amid allegations of fraud.
An administration is a process designed for a rapid business recovery and is therefore distinct from liquidation.
The UK court came into the picture as NMC Health Plc is listed on London Stock Exchange, and thus bound by UK rules governing public companies. It listed on the LSE in 2012.
Trading in the London-listed company, (NMC Health was founded by Indian entrepreneur Bavaguthu Raghuram Shetty back in 1975) and had a market value of $10 billion at its peak, was suspended in February after it revealed more than $4 billion of undisclosed borrowings, pushing its total debt to $6.6 billion.
Last month, the company revealed its debt stood at $6.6 billion, substantially higher than the $2.1bn declared in its last filed accounts. A review committee also discovered evidence of “suspected fraudulent behavior”.
The company made the damaging disclosures after a report by activist investor Muddy Waters in December alleged it inflated cash balances, overpaid for assets and understated its debt.
According to a market observer, it could be considered the largest fraud in modern history which caused a major economic shock in the Emirates.
Following the disclosures, two joint non-executive chairmen, including Mr Shetty (also owner of the UAE Exchange), an executive vice-chairman, a chief executive, chief financial officer and a member of the company’s treasury department all departed from the company.
The health firm employs more than 2,000 doctors and about 20,000 other staff. It operates 2,200 hospital beds as well as clinics and pharmacies in 19 countries.
