The joint administrators appointed to run the UAE's biggest healthcare company, NMC Health, said the company's operating entities would be unaffected by insolvency proceedings, and that their primary objective was to "ensure the continuity of patient care, stability for staff and suppliers, and immediate financial security for NMC's operating companies".
Richard Fleming, Mark Firmin and Ben Cairns from Alvarez & Marsal Europe were appointed as joint administrators to NMC Health on Thursday after the UK High Court upheld an application to have the company placed into administration by its largest lender, Abu Dhabi Commercial Bank. Mr Fleming explained that only the group's holding company has been placed into administration.
"All hospitals, medical centres, care facilities and other operations in the group are not subject to the administration procedure, so their current activities will not change. We believe that this move, combined with our planned changes to NMC's governance, is the best way to ensure stability and continued patient care at this difficult time," said Mr Fleming.
"Our absolute priority is to do everything we can to help these key workers provide the highest quality patient care and services. This is a complex and challenging situation and we will be working tirelessly to support NMC colleagues, patients, customers and other stakeholders."
NMC Health was founded by BR Shetty in Abu Dhabi in 1975, and now employs more than 2,000 doctors and about 20,000 other staff. It operates 2,200 hospital beds as well as clinics and pharmacies in 19 countries.
The company has made a series of damaging disclosures in the past few months after a report by activist investor Muddy Waters in December alleged it inflated cash balances, overpaid for assets and understated its debt.
Last month, the company revealed its debt stood at $6.6bn (Dh24bn), substantially higher than the $2.1bn declared in its last filed accounts. A review committee also discovered evidence of “suspected fraudulent behaviour”.
Following the disclosures, two joint non-executive chairmen, including Mr Shetty, an executive vice-chairman, a chief executive, chief financial officer and a member of the company’s treasury department all departed from the company.
Faisal Belhoul, the managing partner of Dubai-based Ithmar Capital, became executive chairman on March 26 after his firm bought up a 9 per cent stake and had attempted to negotiate a standstill arrangement with NMC Health's creditors. It understood to owe money to about 80 lenders. However, his intervention proved to be too late.
Abu Dhabi Commercial Bank, which is owed $981m by NMC Health, said it had moved to have administrators appointed "in response to recent developments, including the revelation of previously undisclosed liabilities of over $4bn, which suggests a significant risk of insolvency".
It said Alvarez & Marsal "will take immediate control and will work on behalf of all stakeholders".
"Their priority is to ensure stability and the continuation of uninterrupted healthcare services at the group’s medical facilities. The joint administrators are also tasked with implementing robust governance, conducting a full, transparent investigation into suspected previous irregular financial activity and taking adequate steps to initiate the recovery of any missing assets and funds."
In a separate statement on Thursday, Mr Shetty said he was conducting his own investigations and "will make these findings known as soon as possible, and in the proper and appropriate manner".
"I am extremely eager and determined to bring to light the full facts, and the whole truth, around what has transpired to all stakeholders as quickly as possible," Mr Shetty said.