NMC Health  collapses

Former FTSE 100 company has damaged reputations of London and the UAE. The Abu Dhabi based hospital operator BR Shetty (77) set up healthcare provider NMC in 1975, after emigrating to the United Arab Emirates from his native India, He created an emerging market company with a seductive pitch to investors and a charismatic founder and hailed London’s “Deep pool of capital”  and “global profile” as the company prepared for its initial public offering in the UK capital in 2012. Less than a decade later, NMC, the biggest scandals to submerge an FTSE 100 company. The unravelling began in December and accelerated in March, as NMC discovered suspected fraud, disclosed more than $8bn of hidden debts and was forced into administration by its largest lender, Abu Dhabi Commercial Bank which is owed almost $1bn by NMC. Alvarez & Marsal, the restructuring firm appointed as administrators,    wants the clinics to stay open to help battle the coronavirus pandemic that is now sweeping across the UAE.

The big four firms EY was dragged into the scandal after the UK accounting watchdog announced an investigation into its 2018 audit of NMC where they allegedly failed to discovered the hidden debts.

Investors, including Norway’s $1tn sovereign wealth fund, US Asset manager Capital Group and Hermes Investment are furious they will probably be left empty-handed in any restructuring.

Riding an oil-fuelled economic boom in the UAE NMC could do little wrong as its patient numbers climbed into the millions with lucrative fertility clinics and cosmetic treatments were added to the hospitals, and an aggressive expansion plan took the group into the UK, Spain and Saudi Arabia. Today, NMC has 2, 000 doctors and 20, 000 medical staff running 200 facilities that treat over 8.5m patients a year.

 Investors catapulted NMC into London’s group of blue-chip companies in 2017, further turbocharging the shares as index-tracking funds were forced to buy. Between the company’s listing and the suspension of its shares in February, NMC stock surged more than threefold as the FTSE 100 gained slightly more than 20 per cent in the same period.

Dubai court freezes NMC founder Shetty’s assets including the hospital in Abu Dhabi, UAE. As the founder of the new medical centre Health (NMC), Shetty built relationships with the UAE’s most powerful sheikhs that appeared to open doors for him.