12th Mar 2020 08:56
(Alliance News) - Middle East-focused hospital operator NMC Health PLC on Thursday said its independent review has found evidence of fraud.
In January, NMC commissioned a group founded by former US federal judge and FBI director Louis Freeh, as well as law firm Glaser Weil LLP, to conduct a review into allegations raised by short-seller Muddy Waters.
In late 2019, Muddy Waters attacked NMC over the accuracy of its financial statements.
Moelis & Co and accountant PricewaterhouseCoopers were appointed in March to help in talks with lenders.
"The review advisers have informed the committee they have discovered evidence leading to suspected fraudulent behaviour in relation to some elements of NMC's previous financial activities," said the company on Thursday.
"NMC is fully committed to investigating these activities and has notified the relevant authorities in the UK and UAE to determine what action they also consider to be appropriate."
This comes just two days after NMC said it had found USD2.7 billion worth of debt it was unaware of, meaning its debt position was far higher than previously believed.
NMC has also been trying to work out the true shareholdings of some major investors.
Former Chief Executive Prasanth Manghat was fired at the end of February over discrepancies in company finances, while founder and Non-Executive Chair Bavaguthu Raghuram Shetty resigned the same month after being banned from board meetings for inaccurately reporting his shareholding.
NMC shares are currently suspended from trading in London. They were last quoted at 938.40 pence each, having lost 64% since mid-December when Muddy Waters launched its attack.
The share price fall means NMC faces demotion from the FTSE 100 index later in March.
By George Collard; [email protected]
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