By Gavin Gibbon
Firms urging investors to contact them in a bid to recoup losses
Six US law firms have signalled their intent to pursue legal action on behalf of investors against troubled UAE-based NMC Health.
Bernstein Liebherd, Bronstein, Gewirtz & Grossman, Gainey, McKenna & Egleston, Pomerantz Law, Schall Law and Wolf Hadenstein Adler Freeman & Herz have all filed class action lawsuits on behalf of US investors amid allegations of securities fraud.
The Schall Law firm, which represents investors around the world and specialises in securities class action lawsuits and shareholder rights litigation, is encouraging investors with losses of more than $100,000, who purchased the company’s securities between March 13, 2016 and March 10, 2020, to contact the firm before May 11.
A release by the firm alleges that NMC made false and misleading statements to the market; failed to maintain effective internal controls; understated its debts while simultaneously overstating its cash-on-hand; and NMC Health's principal shareholders did not accurately report their interest in the company, which did not review the ownership stakes of these principal shareholders, and therefore could not enforce its Relationship Agreement with them.
A statement said: “Based on these facts, the company's public statements were false and materially misleading throughout the class period. When the market learned the truth about NMC Health, investors suffered damages.”
Trading in the shares of NMC Health was suspended at the end of February as the company moved to provide clarity regarding its financial position, which was later revealed to be substantially above the previously reported $5 billion debt and estimated to be around $6.6bn.
Earlier this month, Abu Dhabi Commercial Bank (ADCB), which has $981 million worth of exposure in the healthcare provider, successfully applied to UK courts to have the company placed into administration and NMC has subsequently been removed from the London Stock Exchange where it once held the prestigious status of being included in the FTSE 100.
Administrators Alvarez & Marsal Europe LLP have since moved quickly to form a new board with extensive restructuring experience".
However, last week, owner BR Shetty, who is currently in his native India, vowed to clear his name after his own legal and forensic investigations revealed "serious fraud and wrongdoing appears to have taken place at "NMC, Finablr, as well as within some of my private companies, and against me personally".
In a strongly-worded statement, Shetty said the fraud "appears to have been undertaken by a small group of current and former executives at these companies".