Shares in NMC Health suspended following accounting scandal
Healthcare provider has fired its chief executive after finding bank discrepancies
Shares in NMC Health, the struggling healthcare provider, have been suspended after it was forced to reveal unauthorised off-balance sheet financing, raising fresh concerns about a mounting accounting scandal that has sparked a boardroom clearout.
After the market closed on Wednesday, the company said its chief executive had been fired and it had suspended a member of its treasury team amid worries that an internal investigation of its finances was being obstructed.
All executives have now been removed from the board, leaving just the five non-executives in charge of the UAE-focused hospital owner, which is facing regulatory scrutiny over its financial position, management and ownership.
On Thursday morning, the UK’s Financial Conduct Authority said that it had agreed to a request by NMC for the temporary suspension of its shares “to ensure the smooth operation of the market”. The company said it was focused “on providing additional clarity to the market as to its financial position and to restoring its admission to trading”.
NMC Health commissioned an independent review into the company’s finances led by former FBI director Louis Freeh after short seller Muddy Waters raised concerns over its balance sheet and management in a report in December.
Interim findings published on Wednesday night flagged potential discrepancies and inconsistencies in its cash position and uncovered a supply chain financing arrangement apparently used by its founder as well as a major shareholder that was guaranteed by NMC, but not approved by the board or disclosed to the market.
The FCA has already said that it was looking at NMC following earlier disclosures over financial arrangements and questions about stakes held by its major shareholders, and to what extent these have been used to raise debt.