NMC Health fac­ing al­le­ga­tions of false in­voices worth bil­lions

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

COL­LAPSED hos­pi­tal firm NMC Health is be­ing in­ves­ti­gated over claims of fake in­voices and forged doc­u­ments re­lat­ing to hun­dreds of mil­lions of dol­lars worth of sales.

The former FTSE 100 hos­pi­tal com­pany – which plunged into ad­min­is­tra­tion in April af­ter bil­lions of dol­lars of undis­closed bor­row­ing was un­cov­ered – is fac­ing new al­le­ga­tions that sham in­voices for medicine sales were be­hind a ma­jor round of bor­row­ing, the

re­ported.

The al­leged scheme in­volved the fun­nelling of loans worth bil­lions of UAE dirhams to NMC via Neopharma, a phar­ma­ceu­ti­cal com­pany owned by NMC’s founder BR Shetty. One dirham is worth 21p.

Abu Dhabi-based NMC al­legedly cre­ated fake or­ders for medicines from Neopharma and its part­ner firm Nex­gen so that it could bor­row money from banks.

The com­bined value of thou­sands of ap­par­ently fake trans­ac­tions was six times Neopharma’s ac­tual sales, ac­cord­ing to doc­u­ments seen by the FT.

Mr Shetty, the In­dian busi­ness­man who founded NMC Health, Neopharma and trou­bled pay­ments firm Fin­ablr, has ac­cused former ex­ec­u­tives of com­mit­ting a “se­ri­ous fraud” against him and vowed to clear his name.

The col­lapse of NMC was an em­bar­rass­ment for the Lon­don Stock Ex­change, which has chased lu­cra­tive in­ter­na­tional busi­ness for years and prides it­self on high gov­er­nance stan­dards.

Au­di­tors at EY, the ac­coun­tant that also au­dited scan­dal-hit Ger­man pay­ments firm Wire­card, face dif­fi­cult ques­tions over their fail­ure to do more to raise red flags prior to NMC’s de­scent into ad­min­is­tra­tion.

EY re­signed as au­di­tor of Fin­ablr in July af­ter a row about the com­pany’s gov­er­nance.

The Fi­nan­cial Con­duct Author­ity launched an in­ves­ti­ga­tion into NMC in Fe­bru­ary when trad­ing in its shares was sus­pended amid con­fu­sion over who ac­tu­ally owned the com­pany.

Ad­min­is­tra­tors from Al­varez & Marsal have quizzed Mr Shetty as well as di­rec­tors, share­hold­ers and staff of the pri­vate hos­pi­tal op­er­a­tor in their in­ves­ti­ga­tion to es­tab­lish NMC’s true fi­nan­cial po­si­tion.

The ad­min­is­tra­tion re­lates to the hold­ing com­pany but NMC’s mostly Mid­dle East­ern hos­pi­tals con­tin­ued to op­er­ate through­out the Covid-19 pan­demic.

Neopharma, Nex­gen and ad­min­is­tra­tors at NMC Health were con­tacted for com­ment.

BR Shetty, the founder of NMC Health, has ac­cused former ex­ec­u­tives of com­mit­ting ‘se­ri­ous fraud’ against him

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