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A billion-dollar freezing order has been imposed on the former chief executive of NMC Healthcare after a judge said his LinkedIn profile showed he was involved in its accounting.
https://www.thetimes.co.uk/article/nmc-chief-faces-1bn-freezing-order-b0xnbvxxj
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There’s a progress report by the Administrators on the NMC Companies House site. It says the preferential creditors have been paid out in full and they expect some kind of payment to the unsecured creditors but they don't expect anything to be left for the shareholders. They’re suing the auditors!
Only the final paragraph applies to the shareholders here. Shareholders aren’t creditors. It’s regrettably very unlikely that the Administrators will find enough plundered money to meet the claims even of the creditors. Shareholders here have been robbed while the Board looked on. Particularly, you might think, the Chairman of the Audit Committee and his fellow committee members. The former had no financial qualification or experience, but he is a member of the Irish peerage. He’s currently Chairman of an AIM oil and gas company. No one is held to account or even feels any sense of responsibility any more.
This was the news I read on Friday.
NMC came out of administration on Friday, ending two years of uncertainty after debts racked up in an alleged fraud threatened to destroy the United Arab Emirates’ largest private healthcare group.
The scandal at NMC left creditors with large outstanding debts. The company collapsed in 2020 after revealing more than $4bn in previously undisclosed liabilities across NMC and other businesses founded by Indian entrepreneur BR Shetty.
A new NMC group, NMC OpCo Ltd, has been formed from 34 of the 36 companies that were subject to the administration proceedings under the courts of Abu Dhabi’s international financial centre, allowing the healthcare operations to continue to trade normally.
The group is now planning to expand its hospitals and clinics, build new revenue streams and find cost efficiencies.
The UK’s NMC Healthcare PLC and UAE-registered NMC Healthcare Ltd will remain in administration, allowing Alvarez & Marsal to continue its investigation and pursue potential avenues to recover funds for creditors.
The only news I can see is the 29 March announcement that the period of Administration has been extended for another three years - until April 2025. Administrators don’t work for nothing. Even if they find anything, it’s likely to go to pay legal etc. fees and secured and unsecured creditors. Shareholders are at the bottom of the pecking order.
I doubt if we get our money back. Then again, the odds probably more than winning the lottery.
Just got a note from my broker about this company coming back again as a restructure. Not sure if that means we will get any money for our shares or if the whole lot is gone.
Yuri.F: I’d say the best way to approach this is to write it off to experience. And if you’re ever invested again in something that Muddy Waters or the equivalent writes a similarly scathing report on, get out of it as quickly as you can (or read the report first, if you can get hold of one. A long summary of the Muddy Waters report on this was available free on the internet). Shareholders here have been robbed by an allegedly corrupt, thieving management, who appear to have done a smart job of covering their tracks.
Investors in this have been extremely unlucky. The shareholders, as owners of the company, are not unsecured creditors and it’s vanishingly unlikely that they’ll see any return from it now. They’ve been robbed and there’s no recourse.
NMC had a gap in finances effectively ending up with negative equity and unable to satisfy all creditors.
Company is insolvent, this is not managed wind-down or voluntary liquidation. Since shareholders are sitting at the end of the creditors list - for insolvency scenarios there's no economic interests for shareholders left after administration (asset sale goes at significant discount, process of winding down costs a lot of money by itself with wulchers circling around).
Generally abandon all hopes. (although hospital equipment is still there, buildings are in place, employee still go to work and get salaries, etc., also subsidiaries are not in administration, most keep trading BAU {especially considering boosted demand for services}, some put into liquidation, shareholders were owning holding company, not trading businesses).
Even it if manages to resurface under the same name - (this covid-related crisis has provided drastic boost for demand for hospital services) - this will be under a different ownership structure (not even mentioning what it's very unlikely to immediately become a company publicly traded/listed on stock market straight away, especially considering all this recent reputational damages related to fraud, unless shattered pieces picked/absorbed {for cheap} up by already listed entity).
Best way to approach this is getting hands on administrators report which is available on companies house register (latest/3rd is dated Nov-2021).
Specifically it says (Joint administrators executive summary section):
preferential creditors are anticipated to receive a dividend of 100p in the £ in the next few months.
estimate of dividend prospects for unsecured creditors cannot be made at this time (but there's is an expectation to have some leftovers to pay it later)
Administration period has been extended (granted by creditors) and expected to run beyond 2022.
Next report is expected to be published in April/May 2022
Hi guys i've looked a few places couldn't see any further news to see if its coming back or not. I read somewhere 16th Dec 2021 should be out of administration and trading again. Thanks in advance.
The ADRs appear still to be trading, $100 worth yesterday, possibly a bit of short closing. I don’t know why it’s still treated as an extant share but the reality is, it’s gone. It’s unlikely in the extreme that shareholders in the defunct former entity will see any return of any kind, in my opinion.
You would probably have to wait until it appears on HMRS' negligible value list (for example like with intu properties) here:
https://www.gov.uk/guidance/negligible-value-agreements
to handle it with your SA for tax purposes (if those are not on ISA)
If that the case why are my Shares in NMC still held in my H&L Account? Surely if this is a non-starter these would have disappeared a long time ago? They still seem to be live on system somewhere waiting for a decision on whether to re-float and gain additional funds on a raise? Maybe, not sure but my account still shows the shares as an entity?
Monty74: the new entity that owns the hospitals, health centres etc. of the former NMC Health plc may apply one day for an LSE listing, it’s possible. Though this time the UK regulatory agencies would want to take a very long look at it first. In any case, it won’t be of any but academic interest to the disenfranchised ex-shareholders of the former FTSE100 company, who have lost their investment. That company has been reorganised and now has new owners.
Sorry for my ignorance but will they list on the FTSE again?
Appreciate your reply. thnks
monty74: NMC is coming out of administration on 16 December and control will then be transferred from the administrators, who’ve been, in effect, running it for the past 19 months or so, to the new owners. These new owners are a consortium of creditors - largely the banks who lost a lot of the money they’d lent to the company when it was allegedly robbed/defrauded. They own the company. They may decide to run it for a while themselves or they may sell it or its assets. The people who owned the shares when it was a FTSE100 company have lost their investment.
The whole thing is an outrage. Dishonesty, lax Board oversight, questions over the audit, absence of effective regulation. I feel extremely sorry for small shareholders in it, they were entitled to honest management of their company and a far more effective regulatory environment.
Are they seriously going to start trading on Dec 16th.. Even if they come back at a £1 we still have a small chance! YES/NO
Any glimmer of hope? even a small one.. i've lost a fortune :(
Leisurely: good luck to them with that. As I understand E&Y (which is not very much) their regional offices are all separately incorporated legal entities. The ADRs are at 5c still, on $200 volume. I don’t think the game is worth the candle in terms of legal action from the shareholders’ viewpoint. Still, the no-win, no-fee lawyers know their business best and it won’t cost the disenfranchised ADR holders anything to join the class actions.
I think nmc are trying to take E&y auditors to court in the states for $4bn negligence. So in 10 years when that concludes we can take the same path in a class action.
Those are the ADRs. There may be some wrinkle in those whereby someone thinks he can get some money by suing the intermediaries through whom they acquired them. There are generally no such protections in the UK. The ADRs were at .30 or so until quite recently. They were at .04 on Friday. They’re at 0.10 today. Less than $200 turnover.
Me also would expect a law company to be organising a class action for the shareholders for fraud.But hows this ??? NMC up 150% ???https://finance.yahoo.com/quote/NMHLY/Wayne
Leisurely: NMC went bust, allegedly robbed by some of its senior management. There are scores of banks whose secured loans can’t be repaid as things stand. There’s nothing for the old shareholders. A number of class actions were initiated by law firms on behalf of shareholders in the summer of 2020 in the USA but nothing seems to have happened and it’s unlikely in the extreme that enough of the misappropriated money will be found to pay anything to shareholders. One has to remember that NMC shared some senior management with Finablr, an international payments firm. The NMC scandal began to be unveiled in mid-December 2019 with the Muddy Waters report. At the end of that month there was a massive ransomware attack on Finablr’s accounting systems, for the unwinding of which they allegedly paid a large sum to the hackers a couple of months later. It’s entirely possible, it seems to me, that the culprits may have covered their tracks by means of this systems outage.
Nmc are due to exit administration by Dec 16th. Does anyone know what that means for shareholders (not suspect, but know)?
Also, assuming we get nothing I’d expect a law company to be organising a class action for the shareholders for fraud. Have only seen something at the beginning of last year covering us shareholders though.