Muddy Waters Scores Big Win for Short-Sellers Over NMC Health - Bloomberg:
In 2018 NMC Health Plc commissioned an external review of its board’s effectiveness. The idea of this box-ticking exercise was to assure investors that the directors of the United Arab Emirates hospital operator were working “in the interests of all key stakeholders.”
The unsurprising conclusion was that the board was “operating effectively and healthily,” NMC’s last annual report revealed. That finding clearly wasn’t worth the paper it was written on.
On Wednesday evening the FTSE-100 company ousted its chief executive officer and revealed that its chief financial officer was on sick leave. An inquiry into a laundry list of allegations published by short-seller Muddy Waters Capital LLC in December has revealed potential discrepancies in the company’s bank statements and accounting ledger entries.
Furthermore, NMC has been acting as guarantor for $335 million of supply-chain financing used by other entities owned by the company’s founder, Bavaguthu Raghuram Shetty, without the board being aware of it (the arrangements weren’t disclosed in the accounts either).
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