NMC Health Plc Review update, CEO removal and other matters (2587E)
February 26 2020 - 12:17PM
UK Regulatory
TIDMNMC
RNS Number : 2587E
NMC Health Plc
26 February 2020
FOR IMMEDIATE RELEASE 26 February 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN
ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR"). UPON
THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
NMC HEALTH PLC
("NMC" or the "Company")
Update regarding independent review, CEO removal and other
matters
NMC announced on 17 January 2020 that the Independent Review
Committee of the Board of NMC (the "Committee") had retained the
law firm Glaser Weil LLP and engaged Mr Louis Freeh, former Federal
Judge and FBI Director, and his firm Freeh Group International
Solutions, LLC (together the "Review Advisers"), in each case to
advise and assist the Committee in relation to its review into
allegations raised in recent reports by short seller Muddy Waters
and certain other third parties. The Committee and its legal
advisors are solely responsible for the identification and
engagement of the Freeh firm.
The work of the Committee and the Review Advisers is ongoing,
but the Committee has updated the Board of NMC (the "Board") in
relation to certain material findings to date.
Supply chain financing arrangements
The Review Advisers have identified supply chain financing
arrangements that were entered into by the Company and which are
understood to have been used by entities controlled by Dr B.R.
Shetty and Mr Khaleefa Butti Omair Yousif Ahmed Al Muhairi (the
"Related Parties"). Under these arrangements, suppliers to
companies owned by the Related Parties were paid by certain credit
facility providers and, while those companies are responsible for
settling the amounts payable to the credit facility providers, the
contractual obligation rests with NMC, which has also provided a
guarantee in the event of non-payment or default.
The facilities have been in place since early-2018. The
draw-down on the facilities as at 31 December 2019 was
approximately $335 million and the current draw-down on the
facilities is the subject of ongoing verification. Having been made
aware of these arrangements, the Board has determined that the
facilities will no longer be made available for further supplier
financing with the aim that the relevant balances should be unwound
in line with existing terms.
These arrangements were not disclosed to, or approved by, the
Board and were not disclosed as related party transactions in
accordance with the Listing Rules. The arrangements were not
reflected on the Company's balance sheet nor reported in the
Company's financial statements for the financial year ended on 31
December 2018.
Other updates
Prashanth Shenoy, the Company's CFO, has been granted extended
sick leave.
In the course of their work to reconcile NMC's cash balances and
net debt as at 15 December 2019, the Review Advisers have
identified potential discrepancies and inconsistencies in the
Company's bank statements and ledger entries. The Committee and the
Review Advisers are investigating these matters and seeking to
determine the materiality of the discrepancies.
As a result of these 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.
Further, the Board has removed Mr Prasanth Manghat from his
position of Director and CEO of the Company with immediate
effect.
The Board has asked Michael Davis, currently Chief Operating
Officer, to assume the position as Interim CEO for the foreseeable
future which he has accepted.
As a result of the delays and additional work referred to above,
the independent review is not expected to conclude for several
weeks, with the consequence that the Company does not expect to be
in a position to publish its FY2019 before the end of April
2020.
The individual responsible for releasing this announcement is
Simon Watkins, Group Company Secretary.
Enquiries:
NMC Health plc
Simon Watkins, Group Company Secretary +44 (0) 203 205 7313
Asjad Yayha, Head of Investor Relations +971 (0) 56 219 0975
FTI Consulting
Edward Bridges / Simon Conway / Victoria Foster Mitchell +44 (0)20 3727 1000
Shane Dolan +971 (0)4 437 2100
About NMC Health
NMC is one of the leading private healthcare operators in the
Gulf Cooperation Council ("GCC") with an international network of
multi-specialty inpatient and outpatient clinics and hospitals,
specialized maternity and fertility clinics, and long-term care
homes hospitals across nineteen countries. NMC also ranks as one of
the top two in-vitro fertilisation operators globally. The NMC
Health group is recognised as a leading provider of long-term
medical care in the UAE through its subsidiary ProVita. Pursing a
selective international expansion programme since 2016, NMC has
total capacity of 2,207 licensed beds across its network. Moreover,
the recent formation of a joint venture with GOSI/Hassana
Investment Company provides a solid platform for continued growth
in the GCC region's largest healthcare market. The NMC Health group
treated over 7.5 million patients in 2018. The NMC Health group is
also a leading UAE supplier of products and consumables coming from
healthcare related products. NMC reported revenues of US$2.1
billion for the year ended 31 December 2018.
In April 2012, NMC was listed on the Premium Segment of the
London Stock Exchange. NMC is a constituent of the FTSE 100
Index.
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END
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