NMC Health has been pushed into administration after banks wrestled control of the failed hospital operator from management following months of revelations about its finances.
Judge Sebastian Prentis approved the appointment of administrators from Alvarez & Marsal (A&M) at a High Court hearing held by videolink.
It comes as regulators investigate the firm over billions of pounds of secret loans. Operations will continue as normal while administrators take control.
Judge Prentis said: “It’s clear that something has gone very wrong with the management and oversight of this company.
“One of the most striking things about this was that until less than four months ago this company was overtly carrying on business entirely as normal. Since then the wheel has turned and it has kept turning.”
The blue chip business's share price fell sharply after feared Californian short seller Muddy Waters launched a stinging broadside on its management and finances in December.
The court’s decision was a victory for Abu Dhabi Commercial Bank (ADCB), one of NMC’s major creditors.
ADCB applied to have administrators appointed after NMC failed to meet its demands to shore up governance. The health business is still in the FTSE 100 because a share price suspension meant administrators of the index were unable to eject it.
The appointment is a blow to the reputation of Indian-born entrepreneur Bavaguthu Raghuram Shetty, who founded NMC in the 1970s. He remained as co-chairman of the Abu Dhabi-based firm until resigning in mid-February amid confusion over the ownership of his shares in the company.
The administration will transfer control of the company from the board to A&M, which could give NMC breathing space to continue trading while relieving it of some of its debts. The business has 18,000 staff in 19 countries and is mostly focused on the Middle East.
NMC said: “The administrators' primary objective is to ensure the continuity of patient care, stability for staff and suppliers, and immediate financial security for NMC plc’s operating companies.
“NMC's hospitals, medical centres, care facilities and other operations in the group will continue to operate, under existing management, with patients continuing to be treated as they are currently.”
NMC owns Aspen Healthcare in Britain, one of the private healthcare companies enlisted by the Government to support the NHS during the coronavirus pandemic.
The judgement was first reported by Bloomberg.