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NMC founder Shetty quits over share reporting scandal

By Frank Prenesti

Date: Monday 17 Feb 2020

(Sharecast News) - Indian billionaire BR Shetty has resigned as a director and co-chair of Middle East healthcare firm NMC Health as the crisis from the unreported share transaction scandal at the company deepened.
Chief investment officer Hani Buttikhi and non-executive director Abdulrahman Basaddiq also quit given their connections to Shetty and other major shareholders who had appointed them to the board.

Mark Tompkins will continue as the sole chairman, the company said in a statement on Monday.

The company said its board did not consider Basaddiq to be independent as a result of his being appointed at the request of principal shareholders.

"We appreciate the difficult situation that he feels that he has been placed in as a result of recent notifications from our principal shareholders, but the board accept the reasons why he felt he needed to step down," Tompkins said.

NMC on Friday admitted it could not say who owned 11.8m share worth ?91.4m held by banks in Abu Dhabi and Bahrain, or 429,000 shares held in Shetty's investment vehicle. Directors of the group failed to report their shareholdings accurately.

Shares in the company went into freefall last December when short seller Muddy Waters, led by Carson Block, released a report that raised questions over NMC's finances and management.

The allegations were that NMC had been understating debts and inflating cashflow. The Gulf hospital operator has denied the claims.

NMC has hired Louis Freeh, a former FBI chief, to investigate. The UK's Financial Conduct Authority is probing disclosures around the shareholdings.

Directors Saeed Mohamed bin Butti al-Qebaisi and Khalifa bin Butti Omair al-Muhairi sold ?375m worth of shares last month to repay debt as the banks called in their loans over the falling share price, the Times newspaper reported last week.

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