The UK financial watchdog, the Financial Conduct Authority (FCA), has opened an investigation into the embattled NMC Health (NMC), the operator of private hospitals in the Gulf states.

The news, which broke mid-afternoon of Thursday, followed a suspension from trading in the company's shares as it struggles to fight of recent criticism. Chief executive Prasanth Manghat has been sacked with immediate effect.


On 17 January NMC initiated an independent review following claims made by short seller Muddy Waters, the controversial research firm run by Carson Block.

Muddy Waters accused the firm of miss stating asset values, cash and debt.  More confusion has emerged over the shareholdings of several major shareholders and directors.

While the investigation is still ongoing the advisers have identified supply chain financing arrangements involving companies controlled by founder Dr Shetty and major shareholder Al Muhairi which were not sanctioned by the board.

The facilities have been in place since early 2018 and the approximately $335m was drawn down as at 31 December 2019, although this is subject to verification.

The problem for shareholders is that the arrangements were not reported in the company’s financial statements. In addition the advisers cannot reconcile NMC’s cash balances and net debt as at 15 December 2019.

The company finance chief Prashnath Shenoy has been on extended sick leave and one member of the group’s treasury team has been suspended pending the result of the review, while other individuals are being reviewed.


This is believed to be the first share suspension of a FTSE 100 company since Polly Peck and the old British and Commonwealth Holdings businesses, both in 1990.

Polly Peck was run by fraudster Asil Nadir who was convicted in 2012 after a Serious Fraud Office raid on the company's offices. British and Commonwealth had its shares suspended following the discovery of accounting irregularities.

NMC Health has seen its market value collapse from more than £8bn to less than a quarter of that since September. The shares are suspended at 938.4p.


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Issue Date: 27 Feb 2020