Member Info for marcus-aurelius

I've pretty much switched off from this bb now because whatever the outcome is, it's probably months away from concluding. The fact that fraud has been highlighted suggests that shareholders will get something back at some point. It might only be a percentage of what you paid in, but will be better than nothing.
How far the books have been cooked is anyone's guess, but there could be potential cases made against numerous individuals and corporate businesses.

If the auditor for the last set of accounts missed $2.7 billion for the debt figure then this is a very big mistake. On the otherhand, if the "secret" loans were taken out between June 2019 and now, then the selling of the build blocks (Buttis) with knowledge of them would surely be fraudulent in their own right. Maybe's the iis will go down this route when more information comes out and the situation is understood.

There will certainly be cases against Shetty/Butti because of their influential roles within the organisation. Other directors/board members could also be held personally responsible and may have to pay compensation. Liability for directors is unlimited. For some of the billionaire shareholders it could potentially be hundreds of million's if they have acted not in good faith or fraudulently.

The banks where these "secret" loans came from could well have to answer a case. It is claimed the board members did not know about these loans, and some (all) have been used for non group purposes- this is very damning. Are the loans even legally binding? For such a large amount, surely there is due diligence that has to be followed. Even if they were authorised by Shetty/Butti, and signed off by the CFO, they failed in their duties.

In the event of an administration, there will be multiple businesses and organisations that could face legal consequences with the potential for some hefty fines/compensation. This is already a full blown accounting scandal, and a big embarrassment for the UAE and LSE. The UAE will want to take a very strong stance on this, especially since it involves their healthcare system.

Shareholders will take a hit in this no doubt, but there is still a fairly good chance there will be value (how little is anyone's guess) back at some future date.

Doddle- Mate, I hold shares here too, but got to be realistic, it's over. The new debt alone is probably worth more than the entire company. It's hard to see any outcome where shareholders will receive any value back. It's painful, I am hurting too, but no point pretending. Best we will see are some long jail sentences. Take care buddy.

https://www.bloombergquint.com/gadfly/nmc-scandal-if-muddy-waters-is-shocked-you-ve-really-been-bad

Like adzy has said, it is pretty much game over. Better to be realistic now, than to have false hope for months. This is fraud on a massive scale, no one could have predicted it. Even Muddy Waters were shocked, so no need to be hard on yourself. I know the pain, I too was long and was fooled by these fraudsters, but nothing can be changed now, just try and move on.


https://www.lse.co.uk/ShareChat.asp?ShareTicker=NMC&share=NMC-Healthcare&thread=A171BE36-6800-4672-93D5-61EAB2099C30&reply=true

There will be multiple lawsuits against the 3 billionaires- criminal and civil. Selling the build blocks in January with knowledge the equity was worthless surely must equate to fraud. I cant see the ii's taking this lying down. $490 million is no loose change!

The investigation teams have been pretty effective thus far, all we can do is hope they get to the bottom and uncover the evidence required for prosecution.

Deos they don't seem to be able to pay wages to their staff never mind anything else. I wouldn't be surprised if the debt is higher than what they have discovered- Shetty most likely has been using NMC to fund his other companies.
My guess is they keep NMC suspended, UAE government continues to help pay the staff and keep the hospitals open whilst the fraud teams investigate where the $3 billion has gone. The end game will be shareholders get wiped out, banks will probably take a hit too, NMC assets are sold to cover debts or the entire company is nationalised by the UAE government.

Those billionaires involved in the fraud will probably try and deny all knowledge and Prasanth Manghat will be their scape goat.

What has happened has happened. This will be a long drawn out process, if shareholders get anything back at all it is a bonus. Just have to move on and don't let this consume you. Life goes on, the more sleeps you have the easier it will be.

Shetty selling like crazy early February and not disclosing to the market. The Buttis doing the same, even selling 240,000 shares the day before NMC got suspended. All this under the knowledge the equity being virtually worthless.
Seriously though, like how much money do these billionaires need? Doesn't reputation count for anything these days?

$3 billion......staggering.

Rastuss, I agree the non payment of wages to staff is not a good look- but it's not like all staff weren't paid. I suspect this only affected a small number of workers. From what I gather, those at lower levels eg nurse/admin have now been paid, it is only senior roles still waiting for payment. Perhaps it only affected 1 hospital center? If this involved a large number of staff you would expect a far greater social media/newspaper coverage.

It is either a payroll issue, or complications involving the signing off on payments eg maybes a new security step because of the allegations of fraud. Remember half the board left, and many relatives of shetty who held senior roles further down also went too. Not too surprising if there were some genuine glitches, NMC is a large complex organisation spanning several countries.

Rastuss, absolutely that is a possibility, and one all equity holders should be braced for. No one has a crystal ball and until reality is discovered at nmc we are all speculating.

The information we have is that the loan facility covenants have been breached as the main shareholders no longer own 30% of the company. This 30% requirement doesn't seem to appear in any of the annual reports. The 240,000 shares sold the day before suspension were reported very long after the fact. There is still x number of shares they are claiming they have no idea where they are. Whatever legal loopholes these billionaires may have in the wording of their equity/loan terms, their reputations will be tarnished.

For all we know NMC might have the short term funding it needs. We do not know if the discrepancies discovered are of "material" value. However to pay back a $2 billion loan in 5 days would be a challenge for most companies. But yes, ultimately this was a governance risk that must be borne by the shareholder. I'm sure the situation will become clearer over the next week or so.

Buttis secretly selling 240,000 on the day before suspension at around £9. If there is a choice between a low ball offer or administration, imo this would be unacceptable within the context. Fraud is seen in a very dim light in the middle east and the punishments are harsh. These billionaires also have their reputations to look after. Screwing over the shareholders in a company vital within the country's healthcare system would also been seen very negatively. Like I said it benefits all, even the creditors more than anyone to secure the short term funding nmc needs.

Just say staff do not get paid for whatever reason; Do you really think they will walk out? It's not like this is some random highstreet retail chain, this business is absolutely vital for the UAE. The government will get involved and provide assistance because it is in their interest to do so. Even more so now with the corona virus about to peak.

Plus we still have yet to find out how "material" these discrepancies are in the financial reports. If the company is on the verge of going bust, which i find unlikely, then massive fraud has occurred and the financial reporting has been heavily fictionalised. I don't doubt there has been creative accounting, but remember this was a ftse100 company. A fraud of this magnitude has never happened before.

A situation occurring where; the largest provider of healthcare for the UAE; denies all muddy water allegations; major shareholders secretly sell off all their shares, then the company goes bust. The ramifications of this would be enormous. It's in everyone's interest a solution is found.

Once the company is sorted out, they should investigate and expose exactly what Shetty/Butti were doing. From the outset it appears a combination of over leveraging and poor governance has brought NMC to this position.

https://www.bloombergquint.com/business/nmc-founder-shetty-is-said-to-weigh-sale-of-pharma-business

Clearly no one knows anything for certain until the company release further statements, but in my opinion, the negativity being portrayed in the media is far worse than the actual situation with the company. Fear of the unknown is normally perceived as worse than the actual event itself. Right now there are only snippets of information meshed into various newspaper articles with click bait headlines. This is the precise reason the shares are currently suspended- to prevent complete share collapse. The fact finding task is complex, and the investigators who are working without the help from key players need time to unravel all of this.

What we know so far is NMC was "contractually obliged" to cover various loans for companies owned by related parties of Shetty and the other main share holder Butti Omair. NMC's name has been used as a guarantee in the event of non payment. The draw down stated in the RNS is $335 million. This is a potential debt that is not currently on the balance sheet- but does not necessarily have to be paid by NMC. Bearing in mind both share holders are still apparently holding several million shares each it seems logical that their companies will pay. But the board had no idea- it is potentially fraudulent activity.

We have also been made aware that discrepancies have been discovered between ledgers and bank statements. How "material" such irregularities are right now is any ones guess and we wont know until further updates. It could potentially mean cash balances are lower than anticipated or stated. Apparently the review has also been obstructed by a member of the treasury team who is now suspended.

The fact that debt restructuring is apparently currently underway would suggest NMC now have some idea of their full liabilities and are formulating a strategy of dealing with it.

To say all is lost based on a couple of subjective and factually incomplete newspaper articles is jumping to conclusions. Like I said before, the shares are suspended, the company will complete their investigations and release their results in due course. There is nothing you can do in the meantime, just don't panic do something you enjoy.

A restructure of existing debts was always on the cards because NMC probably expanded too fast over recent years. The debt burden is high yes, but it's not like the money was used to fund the existing business- NMC bought new businesses. Maybes this article relates to the restructure of these debts? There is no way of telling until NMC themselves release a statement.

In my opinion this is probably a positive thing to happen. The board are no longer under the thumb of some big billionaires and are taking the required steps needed for the businesses. Yes I agree there may be some pain in the short term for the stock price, esp when it reopens, but imo it will trade again. I also believe things are probably appearing worse than they actually are for NMC- negativity becomes a self fulfilling prophecy. However clearly rules have not been followed and this will hopefully be reported on by Freech and acted on by the board. There will probably be more news about this on Monday.

Don't forget there is still a bid process with NMC at the moment and a potential stake purchase by Mubadala. Try and stay positive guys!

The board suspended the shares because until the exact situation is known, the uncertainty will adversely affect the stock price. It is the logical step to make, and one they were probably pressured to do from the ii's who own around 25% of the company. Clearly the board are trying to be as transparent as they can under difficult circumstances and it's a measure to protect the shareholders. The negative news must come out for the company to move forward. The positive thing though is the Freech investigation appears to be no white wash like many expected it to be.

Trying to compare Debenhams or Thomas Cook to NMC is not a good analogy. It's a governance failure within NMC not an operational one. There is massive value still within the company but it depends on the extent of the deficiencies by the previous CEO/CFO. Until the true debt figure is known, the doom and gloom many have here is premature. Take the newspaper headlines with a pinch of salt and wait for the investigations to conclude before you make up your mind. In my opinion they will probably allow Freech to complete his report and release 2019 annual figures before shares commence trading again.