April 30, 2020
Technical Staff
Since last December, the fraud and corruption red flags came out loud and clear. Since then, news reports say that many UAE banks are exposed to more than USD 4.2 billion due to suspected fraud at this healthcare provider conglomerate.
On March 2, 2020, the Guardian newspaper reported that “Troubled hospitals provider NMC Health has asked its banks for an “informal standstill” on its debt payments as it faces a cash crunch amid an accounting scandal. NMC, a member of the FTSE 100 index, said on Monday it was asking lenders to hold off from exercising their rights, which could include demands for debt payments or collateral, on the company’s £2bn debt pile.”
On April 29, 2020, the founder, the Indian billionaire Dr. B.R. Shetty said that “Small group of employees behind fraud at NMC Health, says B.R. Shetty” [note] Read also at https://www.bloomberg.com/amp/news/articles/2020-04-29/nmc-finablr-founder-shetty-says-his-probe-finds-serious-fraud?fbclid=IwAR3bM6sgHDZ5fOnUXKwGdzSG8ZkbH7lm2LUUbtJjt-a_VPCz31m1ZmexF_A#referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s[/note]
This is a developing story that we monitor closely. The magnitude of suspected fraud suggests that there must have been more than one senior official who participated in such a mega suspected fraud. Though, we prefer to wait to see what the independent investigation or the UK courts reveals in the coming weeks and months. But there are many questions that seek answers:
Where were the regulators?
Where were the internal auditors?
Where were the external auditors?
Where was the board of directors?
Where were the internal control systems?
The NMC Health Plc suspected fraud and corruption scandal shall cast its shadows on the business investment in the UAE and developing countries for a long time to come.
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