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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.

Kannur, Jan 23: A member of Rashtriya Swayamsevak Sangh has been arrested for attempting to create unrest in Kerala by hurling crude bombs at RSS office and police picket. The miscreants had reportedly planned to pass the blame on others.

The bomb attack took place of January 16 in Kerala’s Kannur. The accused Prabesh, an RSS hardliner, was arrested from Coimbatore, Tamil Nadu.

According to the Kerala police Prabesh hurled steel bombs towards the police picket in front of Kathirur Manoj Smrithi Kendram, an RSS office.

"He threw bombs during the wee hours of January 16 morning. Following the arrest he has confessed that his aim was RSS office. Kannur, being politically sensitive region, any attack on political party offices will be regarded as an act by the opponent," Kathirur SI Nijeesh said.

"We had a police picket in the region for a few months now. We are assuming he wanted to create unrest in the area by removing the police from the spot. We could contain the situation because of the CCTV visuals. He was identified immediately after the incident. Following the attack he went to Coimbatore and was hiding there. Our team nabbed him from Coimbatore," he said.

The police have also said that the accused Prabesh had many criminal cases pending against him including those under Explosive Substances Act, 1883. He was nabbed by a team lead by Kathirur SI Nijeesh, CPO Rohith and Vijeesh.

The RSS office in the region is named after Kathirur Manoj a senior karyakarta (worker) who was allegedly killed by the CPI(M) activists in 2014. Kathirur Manoj was the prime accused in the attempt to murder of senior CPI(M) leader P Jayarajan in 1999.