Abu Dhabi, Feb 17: NMC Health Plc, a hospital operator targeted by short-seller Muddy Waters, said founder Bavaguthu Raghuram Shetty resigned amid investor concern he faced a margin call and misrepresented his stake.
The board asked for Co-Chairman Shetty’s resignation and it takes effect immediately, according to a person with knowledge of the situation. NMC has lost four board members since Friday, including Vice Chairman Khaleefa Butti, whose holdings are also being probed. The stock, the worst performer on the FTSE-100 Index this year, fell as much as 9.2 percent Monday morning and then rebounded.
“The resignation of senior board members should be viewed positively,” said Abdulla Nahlawi, an analyst at Rasmala Investment Bank in Dubai. “The credibility of the current board has been jeopardized with the unfolding of the recent events.”
NMC shares lost almost half their value the first week of February on speculation the company’s main investors faced a margin call, in which banks seize shares pledged as collateral. NMC said Friday that First Abu Dhabi Bank and Al Salam Bank Bahrain obtained 20 million shares in the company from BRS International Holding, an investment vehicle of NMC’s top shareholders. The banks sold more than 8 million of those shares as “enforcement of security,” NMC said.
NMC operates the largest medical network in the United Arab Emirates and in 2012 became the first Abu Dhabi company to list in London. The shares started teetering in mid-December when Muddy Waters alleged that NMC manipulated its balance sheet and inflated the prices of companies it acquired.
Shetty, 77, was born in India and founded NMC in the 1970s after moving to Abu Dhabi. His spokesman said a legal review of the situation is ongoing and declined further comment.
Chief Investment Officer Hani Buttikhi and board member Abdulrahman Basaddiq also stepped down because they were appointees of Shetty and Butti, NMC said, adding that they had no knowledge of the share transfers.
Questions remain over the role of Shetty’s family at the company. His wife and son-in-law both hold roles in senior management.
Almost 10 per cent of NMC’s freely traded shares are shorted, according to Markit Securities data. In mid-December about a third of them were.
Last week GKSD Investment, an investment company backed by hospital investors, said it’s studying a possible offer for NMC. Under U.K. takeover rules, it has until March 9 to make a bid.
NMC has said Muddy Waters’s claims are false and the company hired former FBI Director Louis Freeh to conduct an independent review. The review is due to be completed before the company issues its financial results in March, the person said.
NMC said Mark Tompkins will continue as the company’s sole chairman.
Mangaluru, Mar 15: A 32-year-old lecturer accused of sexually harassing a girl student was found dead at Kalladka in Bantwal taluk on Monday night.
Comments
Condolences. The content of the news is correct. However his age is not 32. He was above 40. I know him very well. He was suffering from some psychological illness.
Dear Kuswanth,Please dont call chaddi,now changed chaddi and brought new langa,
Really very Sad News, My Heartiest Condolences, may his soul rest in peace. we are loosing young educated, energetic, citizens one by one, Where are you BJP, Bajrangi, Chaddi criminals, you have your Moral Police where are you Goons???? you Buffoon Dodanna fingering to our Great Bhatta no good, he is servant to Innocents, you are correct about him, once Investigation only the real culprit Identifying, but lost was lost, try to keep peace in the region,
Where are you Sharan Goon? go there man do some thing, looks you might be in Mysore to start Looting this is the time you Criminal looters do!!!!!
Jai hoo Siddaramanna.
No doubt this is a pre-planned murder some one has paid lumsum amount superior to kill Harish. Police must arrest first that Bhatta chassis and carry our fair investigation. For money prahakara will do anything.
Jai Ho Karnataka
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