(Sharecast News) - One of the markets' best-known 'short-sellers', Muddy Waters Capital, called on NMC Health to insure the independence of the third party review of the allegations made against it.
Muddy Waters Capital said: "We note that NMC is planning on an "independent" review of its finances.
"The unfortunate history of such reviews is that they are usually exercises in whitewashing that provide little to no transparency or accountability. Companies such as Noble Group and Sino-Forest were both exonerated by their purportedly independent reviews, only to collapse later."
Earlier in the same session, NMC Health announced an "independent review" of its accounts that would be conducted by a "leading accounting firm" and would be overseen by a majority of independent non-executive directors at the firm, accusing "third parties" of misleading and manipulating its share price.
The hedge fund therefore called on the Abu Dhabi-focused health services outfit not to hide behind attorney-client privileges and engage a law firm as part of the review, to fully disclose any limitations placed on the review, ensure that any NMC staff who destroys or withholds requested information was publicly identified and terminated, and made the full report of the investigation public, including the named of those who sign-off on it.
On 17 December, Muddy Waters had alleged that NMC's financial statements had been "manipulated" in order to understate its debt, with the hedge fund also harbouring "serious doubts" about the company's asset values, cash balance, reported profits.
At the time, Muddy Waters said: "We are unsure how deep the rot at NMC goes, but we do not believe that its insiders or financials can be trusted."
As of 1613 GMT, shares of NMC Health were bouncing back by 33.76% to 1,739.50p on significant trading volume.
26 Mar 2020 17:42
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