NMC Health has appointed former FBI director Louis Freeh to look into allegations of financial wrongdoing by the company made by US short-seller Muddy Waters.
The hospital operator’s shares have plummeted 44 per cent since Muddy Waters published a report raising “serious doubts” about the company’s finances and asset valuations on 17 December.
NMC Health has dismissed the report by Muddy Waters as ““unfounded, baseless and misleading,” and appointed a committee of independent board members to investigate the allegations.
The FTSE 100 healthcare firm announced this morning that it had hired Freeh to produce a report on the claims made by Muddy Waters.
“The committee chose Freeh Group to provide a completely independent, unbiased, comprehensive and transparent report that will address all of these allegations,” said chairman Jonathan Bomford.
The committee’s review will initially focus on a confirmation of NMC’s cash balances on 15 December, the firm said in a statement today.
NMC shares rose as much as 7.01 per cent following the announcement of Freeh’s appointment.
A former federal judge, Freeh served as the fifth director of the FBI between 1993 and 2001.
His company, Freeh Group, is a risk management firm “serving in the areas of business integrity and compliance, safety and security, and investigations and due diligence,” according to its website.
Muddy Waters, which is led by Carson Block, made headlines last year after launching a short attack on litigation funder Burford Capital in August — its first attack on a London-listed company.
City A.M. has contacted Muddy Waters for comment.
In a statement issued last month in response to NMC launching an investigation into the allegations made in its report, the short-seller said: “We note that NMC is planning on an “independent” review of its finances. The unfortunate history of such reviews is that they are usually exercises in whitewashing that provide little to no transparency or accountability.”