NMC crisis deepens as founder quits
Chairman followed out the door by two more directors in boardroom exodus
DISGRACED NMC Health lurched deeper into turmoil after its billionaire founder quit the board.
In the latest move to rock the FTSE 100 hospital operator, joint chairman Bavaguthu Raghuram Shetty resigned alongside two other directors.
His exit was said to have been demanded by NMC’s board after the size of his stake was called into question last week.
Chief investment director Hani Buttikhi and non-executive director Abdulrahman Basaddiq also quit, taking the total number of board departures to four after executive vice-chairman Khalifa Butti Bin Omeir Bin Yousef left on Friday.
The sudden changes have left Mark Tompkins, 79, as sole chairman of the crisis-hit company.
Tompkins said Buttikhi and Basaddiq left because of their connections to top shareholders including Shetty, and the board appreciated ‘the difficult situation’ they were in.
No such statements accompanied the resignations of Shetty ( pictured) and Bin Yousef.
Analysts said the news ‘added to the sense of chaos’ surrounding NMC, with shares initially falling by as much as 9pc afterwards.
They later recovered and were up 3.2pc, or 25p, to 800p when markets closed.
The departures marked the latest twist in NMC’s dizzying fall from grace, after short- seller Muddy Waters made troubling claims about the business’s finances in December. Since then shares in the Abu Dhabi-based company have plummeted by 70pc, leaving it battling to salvage its reputation.
Carson Block, boss of Muddy Waters, said the departure of Shetty and others was ‘a symptom of systemic rot and corruption at NMC’.
The crisis at the company worsened last week when
Shetty, who founded NMC in the 1970s, revealed that an arrangement with fellow top investors Saeed Bin Butti Al Qebaisi and Khalifa Bin Butti Al Muhairi may have led to his stake being overstated.
The Indian businessman hired legal advisors to clear the matter up. But on Friday it emerged that a company holding shares for the three men – amounting to around 10pc of NMC’s total equity – was forced to give up some of the stock to banks which were calling in loans. And a further 400,000 shares still remain unaccounted for, NMC admitted. At the same time, the company has effectively put itself up for sale and is trying to court potential suitors.
Investor GKSD, backed by sponsors of Italy’s private hospital chain Gruppo San Donato, said it was considering a bid and Czech activist investor Krupa Global Investments said it had also found another potential buyer. Russ Mould, investment director at AJ Bell, said the NMC saga was ‘turning into one of the worst stock market disaster stories of recent times’.
‘A takeover of the firm, whose operations presumably have some intrinsic value, looks like the most investors can hope for now.’