A former FTSE 100 company has been censured by the UK financial watchdog for misleading investors about the level of its debt by as much as US$4 billion.
NMC Health PLC (LSE:NMC), the UAE-headquartered hospital and clinic operator which tumbled into administration in the spring of 2020, has been under investigation by the Financial Conduct Authority (FCA) since earlier that year when an independent review uncovered “suspected fraudulent behaviour”.
Just before its final collapse, NMC said its debts were at least US$1.6 billion higher than previously thought, admitting to having uncovered a total of 75 debt facilities from over 80 financial institutions in various countries.
The Abu Dhabi based-group, which had a peak market cap of £8.6 billion in 2018 and was still a FTSE 100 company with a £2 billion market value almost right up until the time of its final demise, said its net debt was “around US$6.6 billion”, up from “about US$5 billion”.
In a statement today, the FCA said NMC's statement between March 2019 and February 2020 "contained materially inaccurate information about its debt position", with the investigation finding that the company had been operating dual sets of accounting records.
As its books and directors were based in UAE, the FCA said it had co-operation from NMC’s administrators and law enforcement agencies and other partners abroad to secure the necessary material to clear up the real picture.
A censure was issued by the FCA, which said it would have issued a fine to the company but said this would have reduced the funds available to creditors "as it is anticipated that no funds will remain after creditor claims have been met".
Steve Smart, the FCA's joint enforcement and market oversight chief, said: “The concealment of NMC’s debt position and subsequent collapse has left creditors including investors out of pocket. While the administrator has sought to recover any value and distribute to creditors, the FCA has sought, through the public censure, to explain how and why investors were misled to ensure that lessons are learnt.”