Edwin Coe Shareholder Alert
Edwin Coe LLP, the UK’s first group action law firm, is working with investors on the potential claims they have against NMC Health plc and some of its former directors in relation to alleged mis-information provided to the Market.
After the revelations and events described below the company was suspended from the Market and has now been formerly de-listed leaving shareholders with all value in the shares lost. The company is in the insolvency process of administration. The Administrator’s initial report is due in June 2020. Until then Edwin Coe is in dialogue with shareholders to collect together and protect their position in the insolvency process whilst looking at claims they may have to recover the huge losses suffered.
Fred Sheppard, leading the Edwin Coe team, said:
“Shareholders cannot afford to wait on the administrators. Now is the time to organise and look at all options including within the insolvency.”
If you are a shareholder contact the dedicated NMC team on email@example.com.
On 27 April 2020, in a major blow to shareholders, NMC Health plc requested that its ordinary shared be delisted from the London Stock Exchange. This followed the suspension of trading in the shares of NMC Health plc on 27 February 2020. In the intervening period NMC Health plc announced that Abu Dhabi Commercial Bank PJSC had filed an application with the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies List (ChD) for the appointment of administrators in respect of the Company under paragraph 12(1)(c) of Schedule B1 to the Insolvency Act 1986. The application was successful and Joint Administrators were appointed on 9 April 2020.
The situation began to unravel with short seller Muddy Waters’ report issued 17 December 2019 that cast serious doubt over the company’s finances, including its reported profits and reported levels of debt. In response, NMC Health plc set up an independent committee to review the allegations made by Muddy Waters’ report. The committee reported on 26 February 2020 that it had discovered related party supply chain financing arrangements as far back as 2018 that were guaranteed by NMC Health plc. These arrangements were made without the knowledge of the board members of the company and had not been disclosed to the market in line with listing rules. Consequently, the independent committee announced the removal of NMC Health’s CEO, Prasanth Manghat, and granted the company’s CFO, Prashanth Shenoy, extended sick leave. On 27 February 2020 an RNS announcement was made by NMC Health plc declaring that the FCA had issued a notification to the company that it had commenced a formal enforcement investigation.
On 10 March 2020 NMC Health plc released an RNS that the Group’s debt position was “materially above the last reported number as at 30 June 2019, and is currently estimated to be around $5 billion”. This represented an additional $2.7 billion in debt facilities that had not previously been disclosed or approved by the board of NMC Health. Following this announcement on 12 March 2020 the company issued an RNS to announce that “The Review Advisers have informed the Committee that they have discovered evidence leading to suspected fraudulent behaviour in relation to some elements of NMC’s previous financial activities”. NMC Health then issued a further RNS on 24 March 2020 revealing that another $1.6 billion of debt had been discovered, with the level of debt now sitting at $6 billion. A significant increase from the $2.1 billion of debt originally reported at 30 June 2019.
On 9 April 2020 NMC Health plc announced that it had appointed Alvarez & Marsal as its Joint Administrators. In doing so, the Administrators appointed four new non-executive directors and removed seven existing members of the company’s board.
If you are an investor and have suffered loss contact the Group Action team at Edwin Coe.