NMC board implosion

What a week or so it has been for NMC Health. Back on 10 February, the company put out an RNS stating that its joint chair and founder Dr. B. R. Shetty was undertaking a review to establish the extent of his shareholding in the company, along with that of family members. It also stated that this review might also involve other shareholders’ interests. T
he guts of the RNS reveal that shares in NMC held in a nominee account in the name of B. R. Shetty at Falcon Bank were transferred to a nominee account in the same name at First Abu Dhabi Bank and that the transfer was ’in connection with security arrangements given by Dr. B. R. Shetty in favour of First Abu Dhabi Bank, and that those security arrangements relate to credit facilities made available by First Abu Dhabi Bank to a company associated with Dr. B. R. Shetty’. A seperate point in the RNS relates to another holding in NMC through BRS International Holding Ltd, of which Shetty is the sole shareholder, although it appears that a memorandum of understanding might mean the beneficial ownership of the shares lay with others. NMC stated that it was urgently seeking clarification.
A follow up RNS on 14 February set out in arcane detail the web of different interests in the shares, yet there was still a lack of clarity about various elements. One thing is clear: previous RNS announcements relating to holdings are unlikely to have been accurate.
The exposure of these issues has contributed to a wave of resignations from the board. On 14 February Khalifa Butti Omeir Bin Yousef resigned. Then on 17 February followed non-exec Abdulrahman Basaddiq, director and chief investment officer Hani Buttikhi and finally founder Shetty. That’s a third of the board. It seems a wholesale governance shake-up is required, and with NMC shares having lost more than half their value since the start of 2020 (ouch!) not before time.

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