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.
Comments
real democracy at work here, which muslim outfit is supporting Pakistan and raising anti Indian slogan, if he has any proof he can register a case, why would he keep talking like this when central is with him… but instead !!he is just bul@#$ing to impress those people, who except every what’s app post as proof...RSS had gifted gun to the first terrorist in independent India and like-minded have also made a temple recently for nathuram goadse- rss was also banned for several years, they were against national flag also...and such organisation is still available then why not SDPI????,,tumhara talwar legal hai aur hamara ,chaku illegal ??
as per Hindutva workers they are not working for India they are working for their political masters, so if they commit crime should they be acquitted. Do you know who is making this arrests they are Hindus they are people like us, who put the country first and will arrest any amar akabar Anthony regardless of political masters or religion…
This foul mouthe KSE should know who hoisted Pak flag in Sindagi, where was this Eshwar when Sri Ravi Shankar shouted Pakistan Zindaba infront of Rajnath Singh, defence minister who remained deaf and dumb. Who went to Pakistant without invitation to eat Beef Biryani in wedding and who took Sari and Bangles as gift to Pakistanis. BJP's IT cell in MP caught passing sensitive defence information to ISI which resuted in death of hundreds of our brave soldiers. You anti-national Sanghi scums are a disgrace to human race. Dont open your ugly mouth, you dirty creature now talk about private part of Muslim males, shame on you brain dead .....
Marle... Looks like escaped from mental hospital.
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