Where did the $2.7 billion in additional debt go? That's what NMC Health will try and focus on in the coming days. Image Credit: Gulf News Archive

Dubai: Where did the $2.7 billion go?

It’s a detail that the current management of NMC Health will have to dig deep into. Do a forensic audit, or whatever the fancy term might be.

And more importantly, who got the money? And why?


Because NMC Health in its statement on London Stock Exchange also adds: “The Board (of Directors) believes that some proceeds may have been utilised for non-Group purposes. NMC is continuing to work with its advisers to understand the exact nature and quantum of the undisclosed facilities.”

“It’s shocking – alarms should have rung when it was not recorded in the June 30, 2019 financial statements,” said a banker. “Or was it signed between July and December of last year?

“If the Board of Directors were not aware of it, who else is involved in getting this cleared with banks?”

Interestingly, the current CFO, Prasanth Shenoy, at NMC Health had been asked to remain on leave. This was before the latest revelation of the additional $2.7 billion debt.

More details wanted

While NMC has not formally said so, the debts were approved during the tenure of Prasanth Manghat, the CEO who was dismissed late last month. NMC is yet to reveal the banks that had lent the additional $2.7 billion. It is also not known when these debts were taken.

“Loans of $2 billion in a difficult market is a burden even for the most profitable business,” the banker said. “To suddenly find that it has more than doubled can be a death sentence. Why didn’t anyone inside the company flag this before? Why didn’t the company’s auditors – Ernst & Young - note it?

“If somebody had wilfully not mentioned the debts, will NMC Health press charges?

“And what will be done to bring the funds back? Or can anything be done to bring these funds back?”

More questions than answers at this stage - but NMC Health and its current management will need to come up with something.