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.
The suspects have been identified as Dhanush and Sharath, both aged around 25 years and residents of Mudipu village. Two sharp weapons have also been recovered from them. It is alleged that they have links with a saffron outfits.
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Hope and trust, Police dept will pull out their god father in from of public with impose punishment by sending them behind bar for at least 5yrs period - with out waiting for any source of innocent public's protest.
Please publish their photogrpahs in all available new paper and electronic media first.
Show their faces pls.
Good job Mangalore Police! Keep it up guys!
This youths are paid goondas. Who gave them bike ? who gave them money? who gave them weapons ? who is the real BOSS behind these activities. I am sorry to say that the DK police who knows very well but can't disclose them because of the pressure from the political giants. Everyone knows that Sangha Pariwar's Big bosses are having close relationship with the present governments MLA's , Ministers in DK ( behind the curtain )
Shoot them in the middle of the road...
I request with police dept to find out the real mastermind of this attack and also punish this sanghi terrorists. Kachra nan maklu nimm janmakke thu thu.. Please ban RSS,BD,RS,ABVP and other all kachra sangi organisations.
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