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
He is a rss feeded dog started bark again. No guts to earn by self confidence or by ability and now likcking desh drohi rss feet.
A shame and insult to mankind.
ask him how much money paid for the munaafiq. he is not muslim ,that is why barking .
If i speak logic, i would say suspend these stupid publicity stunt-men
Dear Reshma, i am sorry to learn that you are following this rotten egg. He is a waste in our community and we have kicked out him. He is shoe lickers of sangh parivar and i am sorry to say that if you too like it go with him. He has no right to give this comment. Madrasas are not his father's property. By the way this waste Rizvi is kicked out by his community also and even his parents are ashamed of giving birth to such a rotten egg. This rotten egg Rizvi is follower of Devil and has no respect to any one including hiw own parents. If you still praise him, i think you better consult any Doctor.
do his statements are based on any reports, muslims may agree... ISIS idealogy spread not thru madrasa education but online education without any proper guidance of ulemas (knowledgable person with islamic scriptures). proper Madrasa education may eradicate ISIS idealogy... these soulless shia idealogues with the help of zeonists , capitalists and fascists , want to promote ISIS.. that is reason , they are demanding to shut down madrasa system.
Yogi's slave. We cant excpet more than this from him
Well said sir. Should shut all madrasas
Bitter Truth
This man seems to be good. He told the truth. Should shut down all madrasas. They are injecting unwanted education
The Ashram from wherre you learned should be shut first. Because you are the number one criminal, corrupted, communal terrorist.
This fool should be hanged for his illogic statements.
Who the hell this creature Rizvi to talk about Madrasas. Are Madrasas run by his Father's help. Bull shit. Let him go to hell. He is chappa licker of sangh parivar and appeasing central Govt by giving illogic, illegal and unworthy statements criticisign Muslims only to hide looting of crores of rupees from wakf board. He is a thug and looter. He is not a Muslim and has no right to talk about Madrasas. This hate monger should be dragged out to street and garlanded with old chappals and shoes. He is kicked by his own community for his cheating them. He is being funded by sangh parivar for his wrong doings and illegal activities. Police should dig out his past history and income.
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