Troubled hospitals provider NMC Health has revealed it has almost $3bn more debt than it previously realised, as it continues to investigate an accounting scandal.
The FTSE 100 firm, which is based in Abu Dhabi and runs private hospitals in the Middle East, said it had discovered more than $2.7bn in debt facilities which the company’s board was not aware of and had not approved. It is in addition to the $2.1bn of debt it reported in June 2019.
The company, which is listed in London but headquartered in Abu Dhabi, said in a statement: “NMC is continuing to work with its advisers to understand the exact nature and quantum of the undisclosed facilities. The board believes that some proceeds may have been utilised for non-group purposes.”
The group has been in crisis for more than a month since it revealed accounting inconsistencies, including revelations over the ownership of shares, and has asked its lenders for an “informal standstill” on its debt payments to avoid a cash crunch.
Shares in the firm have been suspended from trading since the end of February, amid the expanding accounting scandal.
The financial watchdog, the Financial Conduct Authority, opened an investigation into the company’s finances at end of the February, after the shares were suspended and the firm fired its chief executive, Prasanth Manghat, and granted its chief financial officer, Prashanth Shenoy, “extended sick leave”.
The clearout at the top of the company came after a board-commissioned investigation by the former FBI director Louis Freeh found that the company had entered into $335m of secret financing arrangements that were used by entities controlled by Bavaguthu Raghuram Shetty, the founder and co-chair of the company, and Khaleefa Bin Butti, another of the main shareholders.
The turmoil at the group was triggered after a December report by short-selling hedge fund Muddy Waters, which said it had concerns over asset values, cash balance, reported profits, and reported debt levels, as well as possible fraud and theft. NMC denied those allegations.
NMC has hired investment bank Moelis & Company, accountancy firm PwC and lawyers Allen & Overy to advise on discussions with its lenders, and manage the company’s finances.
