NMC Health shares are suspended by the watchdog after accounting debacle at the FTSE 100 hospital group sees its top brass forced out
- The troubled hospital group fired its chief executive Prasanth Mangat last night
- American investment firm Muddy Waters first highlighted the problems at NMC
Shares in FTSE 100 healthcare firm NMC Health have been suspended by the financial watchdog.
This comes after the troubled hospital group fired its chief executive Prasanth Mangat, suspended a member of its treasury team and gave ‘extended leave’ to its finance chief after finding discrepancies in its financial statements.
The departures followed an independent review led by former FBI director Louis Freeh being presented to the company’s board.
An NMC Specialty Hospital is seen in the Al Nahda area of Dubai
The review found businesses controlled by a founder of the business and an associate allegedly accessed $335million in secret off-balance sheet financing without the knowledge of its board.
Suspension from the market means that shareholders will be prevented from buying or selling shares in the private hospital firm, trapping investments in the company.
The Abu Dhabi-based firm said it requested that the Financial Conduct Authority (FCA) temporarily suspend its shares to ‘ensure the smooth operation of the market’.
In a statement, it added that it is ‘focused on providing additional clarity to the market as to its financial position and to restoring its admission to trading’.
NMC has appointed current chief operating officer Michael Davis to the chief executive role on an interim basis.
NMC said it also believed that the review had been ‘obstructed’ in its investigation and therefore suspended a member of its treasury team until after the completion of the review.
Muddy Waters’ Carson Block, whose firm first spotted the problems at NMC Health
It added that it is still reviewing whether others have been involved. Prashanth Shenoy, the company’s CFO, has been granted extended sick leave.
The revelations come two months after short-seller Muddy Water raised ‘serious doubt’ over the firm’s finances, raising questions over its reported asset values, cash profits and debt.
After the findings of the review were confirmed, Carson Block of Muddy Waters said: ‘At this point, the company’s announcements speak for themselves and seem to be even more damning than our initial report was.’