UAE News: Abu Dhabi's NMC Health Brought Scandal to London - Bloomberg:
A financial scandal has swept through London and the United Arab Emirates, centered on allegations of fraud at the two core companies of the Abu Dhabi-based tycoon Bavaguthu Raghuram Shetty. Both NMC Health Plc and Finablr Plc have had their shares suspended in London, with NMC losing its place in the FTSE 100 index of leading U.K.-listed companies. It’s been a dramatic turnaround, triggered by a report from the short seller Muddy Waters Capital LLC, for a once multibillion-dollar group that has shaken investor confidence in the Middle Eastern business world and prompted questions about the oversight of London-listed companies.
1. What happened at NMC Health?
The Muddy Waters report on Dec. 17 raised concerns that the Middle East’s largest hospital operator had overpaid for assets, inflated cash balances and understated debt. NMC shares plunged, falling by more than 60% by the time they were halted on the London Stock Exchange in February -- barely 2 1/2 years after joining the likes of HSBC Holdings Plc and AstraZeneca Plc in the FTSE 100. NMC dropped a bombshell in March, disclosing $2.7 billion in previously unreported debt that it said may have been used for purposes not approved by the board. It then bumped up that figure to more than $4 billion, trebling what NMC had originally disclosed as debt. An investigation instigated by NMC founder Shetty uncovered “serious fraud and wrongdoing.”
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