NMC founder alleges fraud, forgery ‘on a grand scale’

A UK court placed NMC Health into administration on the application of ADCB last week. (Reuters)
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Updated 30 April 2020

NMC founder alleges fraud, forgery ‘on a grand scale’

  • Billionaire former chairman B.R. Shetty blames small group of aides after probe into debt-wracked UAE health provider
  • NMC is the biggest health provider in the United Arab Emirates

DUBAI: NMC Health, the troubled UAE-based hospitals group, has been the victim of fraud, forgery and impersonation on a multibillion-dollar scale, according to its founder and former chairman B.R. Shetty.

In a strongly worded statement, Shetty detailed what he described as “serious fraud and wrongdoing” at the company and at his other major business venture, the financial services group Finablr, as well as at some of his private companies and against him personally.

NMC is in administration and has asked for its shares to be delisted from the London Stock Exchange after having uncovered total debts of $6.6 billion, most of it unaccounted.

Finablr is being broken up, with some of its operations being prepared for insolvency, while its UAE foreign exchange business is being run by the country’s central bank.

Shetty’s statement follows investigations by forensic investigators, lawyers and handwriting experts working for the Indian entrepreneur, who is believed to be still in his home country.

The statement fails to name any individuals, but said the alleged offenses appear to have been committed by “a small group of current and former executives” at the companies.

Shetty said that false companies, bank accounts and loan agreements had been set up without his knowledge or authorization, and that he had been supplied misleading financial information. The perpetrators had also used fraudulent powers-of-attorney and expenses payments from his personal companies and bank accounts.

Authorities in the UAE and UK have been informed of the findings. Shetty said that he is cooperating with authorities to “get to the truth and help ensure that misappropriated or missing funds” are identified and returned.

“I will work tirelessly to clear my name,” he said.

“To see everything that my family and I have strived to build over the past 45 years eroded over the course of a few short months, and mainly due to the misconduct and wrongdoing of people I put so much trust in, saddens me beyond words. It has also left my entire family in a perilous financial position,” he added.

Shetty, who founded NMC in the UAE in 1975, ended his executive involvement with the company in 2017, but remained joint chairman until earlier this year, after the scale of its problems became apparent.

Doubts over NMC’s financial health were first raised last year by activist investor Muddy Waters, which identified serious irregularities at the company. Over the space of a few weeks, its share price collapsed and shares eventually suspended.

The crisis at NMC — the biggest health provider in the UAE — comes at a difficult time for the country as it combats the coronavirus pandemic.

An economic downturn because of global lockdowns has put increased strain on the country’s financial system.

Abu Dhabi Commercial Bank (ADCB) is the biggest creditor to NMC, with outstanding liabilities of nearly $1 billion, although many others also have big exposures, as well as international banks such as Barclays, Standard Chartered and HSBC.

ADCB has filed criminal cases against several former executives at NMC, who cannot be named under the country’s laws. There were reports that the UAE central bank has issued freeze orders against several companies and individuals, but these have not been officially confirmed.

A spokesman for Alvarez & Marsal, joint administrator to NMC, said: “We will review the statement as part of our ongoing investigation into the affairs of NMC and look forward to (Shetty) sharing the findings of his investigation with us.”


Oil surges on hopes of new deal on output cuts

Updated 02 June 2020

Oil surges on hopes of new deal on output cuts

  • Brent price has doubled in five weeks
  • OPEC talks may be brought forward

DUBAI: Oil prices surged toward $40 a barrel on Monday as hopes rose for an early agreement to extend the big production cuts agreed by Saudi Arabia and Russia under the OPEC+ alliance.

Brent, the global benchmark, jumped by more 9 percent to nearly $39, continuing the surge that has doubled the price in five weeks — the best performance in its history. It recovered after record supply cuts agreed between the 23 countries of the OPEC+ partnership, and enforced cuts in US shale oil.

DME Oman crude, the regional benchmark in which a lot of Saudi Aramco exports are priced, rose above $40 a barrel for the first time since early March.

Market sentiment was buoyed by the possibility that the Organization of Petroleum Exporting Countries would agree with non-OPEC members to extend the cuts for a longer period than was agreed in April.

Oil analysts expect OPEC to fast track a “virtual” meeting to formally agree to maintaining cuts at the record 9.7 million barrels a day level. The meeting was scheduled for June 9, but bringing it forward would allow producers more time to set pricing levels.

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An official with one OPEC delegation told Arab News there was consensus among the 23 OPEC+ members for the new date, which could be as early as June 4. The meeting will also consider how long the current level of cuts would be maintained. Some OPEC members want it to run to the end of the year, other producers would prefer a two-month extension.

Omar Najia, global head of derivatives with trader BB Energy, told a forum run by Gulf Intelligence consultancy: “I’d be amazed if OPEC did not extend the higher level of cuts. As long as Saudi Arabia and Russia continue saying nice things to each other I’d expect the rally to continue.”

A Moscow source close to the oil industry said energy officials there had come to the conclusion that “the deal is working” and it was important to keep prices at an “acceptable” level.

Sentiment was also affected by a comparatively high level of compliance with the new cuts, running at about 75 percent among OPEC+ members, with only Iraq and Nigeria noticeable under-compliers.

Robin Mills, chief executive of Qamar Energy, said: “That’s where I’d expect it to be after two months in such a fluid situation. It will be even better in June.”