(Alliance News) - NMC health PLC on Thursday afternoon said the UK Financial Conduct Authority has commenced a formal investigation into the Abu Dhabi-focused hospital operator.
In a short statement, the company also said that it will continue to co-operate with the FCA and any and all other relevant authorities.
This comes after NMC shares were suspended earlier on Thursday, the latest development arising from recent uncertainty over the shareholding of its founder and former chair Bavaguthu Raghuram Shetty.
Shetty resigned as non-executive chair earlier in February. He had been banned from attending board meetings for inaccurately reporting shareholdings in the company.
On Wednesday, NMC Health removed its chief executive after an independent review revealed potential discrepancies in the company's finances. The company also granted Chief Financial Officer Prashanth Shenoy an extended sick leave and suspended a member of the treasury team pending the completion of an independent review.
In 2019, short-selling firm Muddy Waters 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.
In January, NMC asked Freeh Group International Solutions LLC, founded by former US federal judge and FBI director Louis Freeh, and law firm Glaser Weil LLP to provide a independent report addressing allegations raised by short-selling firm Muddy Waters Capital LLC.
On Wednesday, the company said that independent review found discrepancies and inconsistencies in ledger entries and bank statements. The review also identified supply chain financing arrangements that were entered into by the company and which are understood to have been used by entities controlled by Shetty and former vice-chair Khaleefa Butti Omair Yousif Ahmed Al Muhairi. Under the arrangements, suppliers to companies owned by Shetty and Muhairi were paid by certain credit facility providers.
By Ife Taiwo; ifetaiwo@alliancenews.com
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