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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.

Bengaluru, Jan 17: Karnataka Health Minister and BJP leader B Sriramulu on Friday claimed that Congress supports Social Democratic Party of India (SDPI) and Popular Front of India (PFI) to disturb peace in the state.

His statement came after the arrest of 6 SDPI supporters in connection with an attack on a BJP-RSS follower during a pro-CAA rally held in December last year.

"The Congress party 100 per cent supports SDPI and PFI. Whenever they do not get the power, they try to disturb the peace with the support of SDPI and PFI. I will propose in Karnataka Assembly session to ban these organisations in Karnataka. We will discuss this matter," Sriramulu told ANI.

"We had already demanded for the ban on these organisations in Karnataka when I was an MP. Shobha Karandlaje, Yediyurappa and I had met Rajnath Singh, the then Home Minister in Delhi and we had given a memorandum to ban SDPI and PFI," he added.

A case has been registered against arrested SDPI supporters under relevant Sections of the Indian Penal Code (IPC). Bengaluru Police is constituting a new Special Investigation Team (SIT) to handle this case.

"There were 6 people belonging to SDPI, who were here to carry out attacks on leaders supporting CAA. These people were being paid Rs 10,000 from their handlers to create ruckus here. Now this will be handled by the Anti-Terror unit," said Bhaskar Rao, Bengaluru Commissioner of Police.

Earlier today, Karnataka Minister Jagadish Shettar called for a ban on SDPI.

"SDPI always denies their involvement but it has been proved now. I welcome the police's action. Their organisation should be banned as they have always been involved in anti-social activities and government of India should take very serious note of this," Shettar told ANI here.