17th Feb 2020 08:55
(Alliance News) - NMC Health PLC on Monday reported a slate of board departures including the resignation of founder and joint Non-Executive Chair Bavaguthu Raghuram Shetty.
The departures comes as NMC tries to unravel the shareholdings of some of its major investors.
Shares in NMC Health were down 2.9% at 750.40 pence each in London on Monday morning. Year-to-date the stock has declined by 58%.
The Abu Dhabi-based hospital operator said Shetty, who had been banned from attending board meetings for inaccurately reporting shareholdings in the company, has resigned with immediate effect.
Mark Tompkins will continue as the sole non-executive chair, NMC said. Tompkins has previously served as non-executive chair of UK-based domiciliary care and healthcare staffing services provider Allied Healthcare International Inc and Healthcare Enterprise Group PLC.
The FTSE 100-listed company also separately announced the departures of Chief Investment Officer Hani Buttikhi and Director Abdulrahman Basaddiq. Their resignations are with immediate effect.
Buttikhi and Basaddiq were appointed to the company's board under a relationship agreement between NMC, Shetty, Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and now-resigned Vice Chair Khaleefa Butti Omair Yousef Ahmed Al Muhairi.
The relationship agreement permitted the company's principal shareholders, Shetty, Al Qebaisi and Omeir Bin Yousef, to appoint nominees to NMC's board.
Buttikhi and Basaddiq attributed their resignations to share dealings between the company's principal investors.
The resignation of Omeir Bin Yousef as vice chair was announced by UAE-focused NMC on Friday.
NMC has been trying to unravel shareholdings of investors Shetty, Al Qebaisi, and Omeir Bin Yousef following the revelation of a complex set of share transfers between the trio.
The company on Friday laid out the complex share dealings but said information was not independently verified or confirmed and urged the three investors to clarify their shareholdings.
The share dealings between the trio involved Shetty pledging NMC shares to banks as loan securities, a deal in which Al Qebaisi and Omeir Bin Yousef were not part of.
Short-selling firm Muddy Waters Capital LLC in 2019 raised doubts over NMC's financial statements, including reported profit and levels of debt, and a USD107.4 million investment by NMC in the redevelopment of NMC Royal Women's Hospital, previously known as Brightpoint Royal Women's Hospital.
"Red flags" in this investment included the cost being USD7,700 per metre squared, exceeding Muddy Waters' expectation of USD3,500 to USD4,000 per metre squared. NMC's decision not to disclose the contractor responsible for the renovation work on the hospital "appears to be de facto controlled by BR Shetty" was also highlighted by Muddy Waters.
Muddy Waters' claims were disputed by NMC, which has previously called the allegations "unfounded, baseless and misleading".
In January, NMC asked Freeh Group International Solutions LLC, founded by former US federal judge and FBI director Louis Freeh, to "provide a completely independent, unbiased, comprehensive and transparent report that will address all of these allegations".
NMC on Monday last week separately confirmed "highly preliminary approaches" from private equity firms Kohlberg Kravis Roberts & Co and GK Investment Holding Group.
Subsequently, US-based KKR confirmed it does not intend to make an offer for NMC, while Swiss-headquartered GKSD Investment confirmed it was considering a potential offer for the company.
By Tapan Panchal; [email protected]
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