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Thu 27 Feb 2020 07:31 PM

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London Stock Exchange watchdog launches probe into UAE's NMC Health

Financial Conduct Authority notifies troubled healthcare operator that it has commenced a formal enforcement investigation

London Stock Exchange watchdog launches probe into UAE's NMC Health

NMC said it will continue to co-operate with the FCA and any and all other relevant authorities during the probe which follows the suspension of its shares after it sacked its chief executive.

The Financial Conduct Authority (FCA), the watchdog of the London Stock Exchange, on Thursday notified UAE-based healthcare operator NMC Health that it has commenced a formal enforcement investigation into its business.

NMC said it will continue to co-operate with the FCA and any and all other relevant authorities during the probe which follows the suspension of its shares after it sacked its chief executive.

CEO Prasanth Manghat will be succeeded on an interim basis by Michael Davis, currently chief operating officer, with immediate effect, the company said in a statement, adding that chief financial officer Prashanth Shenoy has been granted extended sick leave.

Operator of the largest medical network in the UAE, NMC had commissioned a review of potential financial discrepancies. It said Wednesday that it has suspended a member of the treasury team because of “a belief that the independent review has been obstructed,” and is looking at whether others are involved.

Founder Bavaguthu Raghuram Shetty resigned from the board earlier this month amid investor concern he faced a margin call and misrepresented his stake.

The latest moves come after a scathing report from Muddy Waters in December that has slashed the stock’s value by about two-thirds. The investment firm alleged the company manipulated its balance sheet and inflated the prices of assets it purchased.

NMC has said the allegations are false and hired former FBI Director Louis Freeh to conduct an independent review.

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