‘Evidence of fraud’ at troubled UAE-based hospitals group NMC

‘Evidence of fraud’ at troubled UAE-based hospitals group NMC
NMC Health has identified it has an additional $2.7 billion of debt. (Reuters)
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Updated 13 March 2020

‘Evidence of fraud’ at troubled UAE-based hospitals group NMC

‘Evidence of fraud’ at troubled UAE-based hospitals group NMC
  • Advisers to the group said that they had uncovered signs of “suspected fraudulent behavior” at the company

DUBAI: Fraud has been alleged for the first time at NMC Health, the troubled UAE-based hospitals group.

In a statement to the London Stock Exchange, where NMC shares are listed, advisers to the group said that they had uncovered signs of “suspected fraudulent behavior” at the company.

Although financial irregularities have been alleged at NMC since American activist investor Muddy Waters attacked it in a report last December, fraud — a criminal offense in the UAE and UK — had not so far been alleged. The company’s advisers — US investment bank Moelis & Co, accountants PWC and lawyers Allen & Overy — have referred their evidence to the authorities in the UAE and UK.

NMC affairs are being probed by a special review committee set up under former FBI boss Louis Freeh.

Its statement said: “The review advisers have informed the committee that they have uncovered evidence leading to suspected fraudulent behavior in relation to some elements of NMC’s previous financial activities . . . NMC is fully committed to investigating these activities and has notified the relevant authorities in the UK and UAE to determine what action they also consider to be appropriate.” 

NMC is the biggest health care provider in the UAE and has operations in 18 other countries, including Saudi Arabia where it runs hospitals in Jeddah and Al- khobar. Last year it signed a joint venture with Saudi authorities to develop medical facilities there.

“Whilst these various investigations are ongoing, NMC remains fully focused on the provision of its health care services in all communities in which it operates, and on its business performance, as well as safeguarding its operational liquidity to continue funding existing operations throughout its various subsidiaries,” the statement to the LSE added.

NMC was founded by Indian entrepreneur BR Shetty in the 1970s and was run by him and two Emirati businessmen — Khaleefa Butti Omair Al-Muhairi and Saeed Mohamed Butti Mohamed Khalfan Al-Qebaisi — after it was floated on the LSE in 2012. Shetty resigned executive roles in 2017.