(Alliance News) - NMC Health PLC on Friday announced the resignation of Vice Chair Khalifa Butti Omeir Bin Yousef with immediate effect amid a legal review.
UAE-focused private hospital operator NMC suspended Omeir Bin Yousef on Monday, asking him and Joint Non-Executive Chair Bavaguthu Raghuram Shetty to "absent themselves from further board discussions".
On Monday, NMC said Shetty's advisers were conducting a legal review in order to verify the size of the total interests of himself and associated family holding companies.
The Abu Dhabi-based company said the review suggests that the total beneficial interests of Shetty and other investors including Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Omeir Bin Yousef had been "incorrectly reported historically to the company and the market".
This follows a report by by short-selling firm Muddy Waters Capital LLC which raised doubts over NMC's financial statements, including its reported profit and level 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 that 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 are disputed by NMC, which has previously called the allegations "unfounded, baseless and misleading".
In Janauary, 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 Health on Monday separately confirmed "highly preliminary approaches" from private equity firms Kohlberg Kravis Roberts & Co and GK Investment Holding Group. Subsequently, US-based KKR confirmed that it does not intend to make an offer for NMC Health, while, Swiss-headquartered GKSD Investment confirmed it was considering a potential offer for the company.
Shares in NMC Health were down 2.4% at 798.40 pence each in London on Friday morning.
By Anna Farley; annafarley@alliancenews.com
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