Internal investigation reveals instances of fraud, according to NMC Health. Image Credit: Gulf News Archive

Dubai: There have been instances of “fraudulent behavior” at NMC Health, the company has said in a statement on London Stock Exchange. This was confirmed after an investigation ordered by the hospital operator's independent Board of Directors.  

The "Review Advisers" have "discovered evidence leading to suspected fraudulent behaviour in relation to some elements of NMC's previous financial activities," the company said in a statement to the London Stock Exchange. "NMC is fully committed to investigating these activities and has notified the relevant authorities in the UK and UAE to determine what action they also consider to be appropriate."

What led to this?

It was late December that a US based investment firm Muddy Waters first pointed a finger of accusation at NMC Health and its financials. Even though NMC at the time rejected the allegations, it launched an internal audit headed by external investigators.

It then led to the NMC founder Dr. B.R. Shetty stepping down as chairman, and the ouster of then CEO, Prasanth Manghat, who was replaced by Michael Davis as Interim CEO. There was also the discovery of $2.7 billion in undisclosed debt. Thursday's announcement confirming fraud closes this chapter of the investigation.

According to a banking source who is closely associated with the company, "There is ample evidence now in the public domain that the board of NMC Health has made a remarkable recovery upholding the morality of business ethics around corporate governance and disclosures."

"It's now up to the new CEO to make an all-out effort to bring the company back on its feet - the baseline of NMC is still extremely strong."