Originally posted to the Gulf News website, 10 February 2020
Geneva: NMC Health Plc, the operator of the biggest network of hospitals in the UAE, said its chairman will be removed from board discussions after he said he may have misreported the size of his stake.
Its Chairman, Dr. B.R. Shetty, is conducting a legal review into the size of his stake, NMC said Monday. The company is asking its main shareholders for clarity on whether they have pledged any of their holdings as collateral. The stock fell 46 per cent last week on speculation major shareholders faced margin calls and were being forced to sell the shares.
It has been reported that NMC had received an offer for 2 billion pounds. These approaches were from private equity firms. The hospital operator said Kohlberg Kravis Roberts & Co. and GK Investment made “preliminary” approaches.
Monday’s disclosures compound the turmoil surrounding NMC, which has been the target of short seller Muddy Waters Capital llc since December. The firm alleges that the company manipulated its balance-sheet and inflated the prices of assets it purchased. NMC, which denied the allegations, said the board has asked Shetty and Vice-Chairman Khaleefa Butti Omair Yousif Ahmed Al Muhairi not to attend any board meetings until the size of their stakes is clarified.
NMC also said the board will make a decision about whether Shetty and Butti should remain as company directors.
In December, American short-seller Carson Block’s Muddy Waters raised “serious doubts” about the company’s accounts, questioning the group’s asset values and cash balance.
Muddy Waters questioned NMC’s use of certain financing methods that do not get recorded as debt in its balance sheet. In response, NMC said these facilities are “commercial matters” for its suppliers, adding it has never told investors that its suppliers “have not used, or are not using” these techniques.
The US short seller also accused the company of “deliberately” understating its debt by about $320 million for the fiscal 2018 year by incorrectly reporting leases associated with its Aspen Healthcare acquisition.
Link to the original post : https://gulfnews.com/business/uaes-largest-healthcare-provider-nmc-becomes-a-potential-takeover-target-1.69620570
