Its shares have now been suspended from the London stock exchange, with the company stating it is ‘focused on providing additional clarity to the market as to its financial position’.

The Abu Dhabi-based firm runs private hospitals and facilities in UAE and 19 other countries. Its finances have been under scrutiny since Californian research firm Muddy Waters raised questions about its accounting practices in a briefing at the end of last year. 

In January the board retained law firm Glaser Weil and Freeh Group International Solutions, run by former FBI director Louis Freeh, to review the allegations.

Their report has identified supply chain financing arrangements between NMC Health and entities controlled by the company’s founder, Bavaguthu Shetty, and Khaleefa Butti Al Muhairi, who was executive vice-chairman.

Under these arrangements, suppliers to these companies were paid by certain credit facility providers and, while those companies are responsible for settling the amounts payable to the credit facility providers, the contractual obligation rests with NMC, which has also provided a guarantee in the event of non-payment or default.

The facilities have been in place since early-2018. The draw-down on the facilities as at 31 December 2019 was approximately $335mn and the current draw-down on the facilities is the subject of ongoing verification.

These arrangements were not disclosed to, or approved by, NMC Health’s board and were not disclosed as related party transactions in accordance with the listing rules.

The arrangements were not reflected on the company's balance sheet nor reported in its financial statements for the financial year ended on 31 December 2018.

Having been made aware of these arrangements, the board says it has determined that the facilities will no longer be made available for further supplier financing with the aim that the relevant balances should be unwound in line with existing terms.

In the wake of the findings, Prasanth Manghat has been removed from his position of director and CEO of the Company with immediate effect, and CFO Prashanth Shenoy has been granted extended sick leave.

In the course of work to reconcile NMC's cash balances and net debt as at 15 December 2019, the review identified potential discrepancies and inconsistencies in the company's bank statements and ledger entries. These are being investigated to determine the materiality of the discrepancies.

As a result of these issues and a belief that the independent review has been obstructed, one member of the company's treasury team has been suspended pending completion of the independent review. The board is reviewing whether other individuals have been involved and will take action as appropriate.

NMC Health said that as a result of the delays and additional work referred to above, the independent review is not expected to conclude for several weeks, with the consequence that the company does not expect to be in a position to publish its FY2019 results before the end of April 2020.

According to its 2018 annual report, EY was appointed as external auditor at the time of the company’s IPO in April 2012.

The firm was paid a total of $5m in fees for the year, made up of $1m for auditing the company’s annual accounts, $2.6m for auditing its subsidiaries, $346,000 for audit-related services and $984,000 in non-audit fees.