Collapsed hospital firm NMC Health is being investigated over claims of fake invoices and forged documents relating to hundreds of millions of dollars worth of sales.
The former FTSE 100 hospital company – which plunged into administration in April after billions of dollars of undisclosed borrowing was uncovered – is facing new allegations that sham invoices for medicine sales were behind a major round of borrowing, the Financial Times reported.
The alleged scheme involved the funnelling of loans worth billions of UAE dirhams to NMC via Neopharma, a pharmaceutical company owned by NMC’s founder BR Shetty. One dirham is worth 21p.
AbuDhabi-based NMC allegedly created fake orders for medicines from Neopharma and its partner firm Nexgen so that it could borrow money from banks.
The combined value of thousands of apparently fake transactions was six times Neopharma’s actual sales, according to documents seen by the FT.
Mr Shetty, the Indian businessman who founded NMC Health, Neopharma and troubled payments firm Finablr, has accused former executives of committing a “serious fraud” against him and vowed to clear his name.
The collapse of NMC was an embarrassment for the London Stock Exchange, which has chased lucrative international business for years and prides itself on high governance standards.
Auditors at EY, the accounant that also audited scandal-hit German payments firm Wirecard, face difficult questions over their failure to do more to raise red flags prior to NMC’s descent into administration.
EY resigned as auditor of Finablr in July after a row about the company’s governance.
The Financial Conduct Authority launched an investigation into NMC in February when trading in its shares were suspended amid confusion over who actually owned the company.
Administrators from Alvarez & Marsal have quizzed Mr Shetty as well as directors, shareholders and staff of the private hospital operator in their investigation to establish NMC’s true financial position.
The administration relates to the holding company but NMC’s mostly Middle Eastern hospitals continued to operate throughout the Covid-19 pandemic.
Neopharma, Nexgen and administrators at NMC Health were contacted for comment.