Case details

Type of claim: Investigating

Claim period: 1 January 2018 to 26 February 2020

Defendants: NMC Health Plc

Jurisdiction: England

Governing law: English law

Limitation: TBD


Case summary

On 27 February 2020, the shares of NMC Health plc were suspended on the London Stock Exchange following the announcement on the previous night of the firing of its CEO, the suspension of its treasury team and the granting of extended sick leave to its chief financial officer.

The short seller Muddy Waters issued a 34-page report on 17 December 2019 stating they were short NMC Health plc shares due to the fact they had serious doubts about the company’s financial statements including its asset values, cash balance, reported profits and reported debt levels.

On the 17 January 2020, in response to the Muddy Waters report, NMC Health plc announced it had hired the former FBI director Louis Freeh to head up an independent committee to review the allegations made in the report.

On 26 February 2020, an RNS announcement was made to the market regarding the independent review and announcing the immediate removal of the CEO. The update disclosed that the reviewers had discovered related party supply chain financing arrangements guaranteed by NMC Health plc that the board was unaware of going back to early 2018. It was also announced that the company’s CFO had been granted extended sick leave. Additionally, the company stated that in the course of its work to reconcile NMC’s cash balances and net debt as at 15 December 2019, the review team had identified potential discrepancies and inconsistencies in the company’s bank statements and ledger entries. The independent committee and the review advisers are investigating these matters and seeking to determine the materiality of the discrepancies.

As a result of the above issues and a belief that the independent review has been obstructed, one member of the company’s treasury team has been suspended pending completion of the independent review. The board is reviewing whether other individuals have been involved and will take action as appropriate.

On the 27 February 2020, an RNS announcement was made by the company stating that the FCA had notified the company that it had commenced a formal enforcement investigation.

On 2 March 2020 the Financial Times reported that NMC Health plc had hired Moelis to advise on debt restructuring and that NMC Health was seeking to agree a standstill in relation to existing facilities with its lenders.

NMC Health plc shares closed at £9.384 on 26 February 2020, a market capitalisation of just under £2bn, which is down from a high of c£8.5bn it reached in August 2018.

NMC Health plc is expected to fall out of the FTSE 100 when the next change occurs on the 3 March.

On 10 March 2020 NMC Health plc released an RNS announcing that: “the Group’s debt position was materially above the last reported number as at 30 June 2019, and is currently estimated to be around $5 billion. The work on verifying this figure is ongoing. In addition to $2.1 billion Group debt reported at 30 June 2019, the Company has identified over $2.7 billion in facilities that had previously not been disclosed to or approved by the Board.”

On 12 March 2020 NMC Health plc released an RNS announcing: “The Review Advisers have informed the Committee that they have discovered evidence leading to suspected fraudulent behaviour in relation to some elements of NMC’s previous financial activities. 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. Moelis, PwC and Allen & Overy continue to support the Company, including in its discussions with lenders and to assist in providing transparency with respect to its financial position.”

On the 24 March 2020 NMC Health plc published another RNS disclosing that it had discovered another $1.6bn of debt from the $5bn announcement it made on its RNS announcement of the 10 March 2020.


Stewarts is monitoring the situation to determine whether shareholders may have a claim against NMC Health plc.



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