Monday 6 April 2020 8:19 am

NMC Health strives to avoid administration after being hit by creditor court action

Scandal-hit NMC Health is working to avoid going into administration after being hit by a court action brought by one of its creditors.

The London-listed company said today that lawyers acting for Abu Dhabi Commercial Bank (ADCB) filed an application on 2 April in the High Court to appoint administrators to NMC with a hearing scheduled for 9 April.

Read more: NMC Health says its debt is $1.6bn higher than previous estimate

NMC said it was in discussions with ADCB and others creditors to have the application withdrawn.

The company said it does not think the appointment of administrators “would be in the interests of stakeholders as a whole”.

It said resolution of the request to appoint administrators “is likely to involve material changes to corporate governance of the group and the composition of the board itself”.

NMC has been in crisis since December when shortseller Muddy Waters questioned its financial statements.

After launching an internal investigation, NMC said it had discovered evidence of fraud and ousted its founder BR Shetty – who denies wrongdoing – and suspended its shares.

Read more: EY resigns as auditor of Travelex owner Finablr as board members quit

In February the Financial Conduct Authority said it had launched an investigation into the struggling business.

Payments business Finbalr – which was also founded by Shetty – is also on the brink after it too discovered unauthorised cheques which may have been used as security for financing for the benefit of third parties.

Last week its auditor EY resigned citing “concerns arising out of recent events at the company and NMC Health”.

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