The joint administrators of UAE healthcare group NMC Health have said they intend to begin legal action in a bid to recover part of the $4 billion that disappeared from the company.
Cases are expected to be filed once the group's restructuring through a Deeds of Company Arrangement, or Doca, is complete, Richard Fleming, joint administrator from Alvarez & Marsal, said.
A Doca refers to binding arrangement between a company and its creditors that details how the former's assets and operations are to be dealt with.
“Investigations on the cause and facilitation of the fraud, which was catalyst to the crisis that befell NMC in February 2020, is ongoing and progressing at pace," said Mr Fleming.
"Following the formal launch of the Doca, the joint administrators intend to start commencing legal actions.”
NMC Health was placed into administration in April last year. Problems at the UAE's biggest healthcare group first emerged in December 2019 after activist investor Muddy Waters issued a report claiming the company had under-reported its debts and inflated the value of its assets.
That triggered an investigation that uncovered more than $4.4bn of previously unreported debt. In total, $6.4bn worth of claims were filed with administrators from hundreds of creditors.
The proposed restructuring involves bringing the company's debt back down to a more manageable level of $2.25bn, with creditors receiving equity stakes in return for part of the $4bn-plus written off.
The deal had received "firm commitments" from most creditors, with companies representing 99 per cent of the allocated value in the restructured group acceding to proposals, administrators said last month.
However, it is understood that Dubai Islamic Bank, which is owed about $425m by NMC Health and is involved in ongoing legal disputes with NMC entities in onshore Dubai and Sharjah courts, has not agreed to the restructuring. DIB did not immediately respond to a request to comment.
In a progress report filed in May, NMC Health's administrators said they were continuing "to progress the investigation and formulation of claims" in a bid to pursue some of the missing money.
They issued letters before legal action to the group's former auditors, EY, and were in the process of issuing letters against "certain former directors of the company", they said, without naming them.
EY told The National at the time that it had "received correspondence from the administrators to NMC Health indicating an intention to pursue a claim", but declined to comment further.
The progress report said administrators had also received information requests from "various regulators and law enforcement agencies" including the UK's Serious Fraud Office and the Financial Conduct Authority, as well as the US Securities and Exchange Commission and the Department of Justice.
NMC Health's biggest lender, Abu Dhabi Commercial Bank, has already taken action in both UK and UAE courts to freeze the assets of former directors and of the group's founder and former chairman, BR Shetty.
Mr Shetty has denied any wrongdoing at the company, saying that bank accounts, cheques and bank guarantees were created in his name but without his knowledge, using forged signatures.
UAE currency: the story behind the money in your pockets
Other key dates
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Finals draw: December 2
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Finals (including semi-finals and third-placed game): June 5–9, 2019
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Euro 2020 play-off draw: November 22, 2019
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Euro 2020 play-offs: March 26–31, 2020
Normcore explained
Something of a fashion anomaly, normcore is essentially a celebration of the unremarkable. The term was first popularised by an article in New York magazine in 2014 and has been dubbed “ugly”, “bland’ and "anti-style" by fashion writers. It’s hallmarks are comfort, a lack of pretentiousness and neutrality – it is a trend for those who would rather not stand out from the crowd. For the most part, the style is unisex, favouring loose silhouettes, thrift-shop threads, baseball caps and boyish trainers. It is important to note that normcore is not synonymous with cheapness or low quality; there are high-fashion brands, including Parisian label Vetements, that specialise in this style. Embraced by fashion-forward street-style stars around the globe, it’s uptake in the UAE has been relatively slow.
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Multitasking pays off for money goals
Tackling money goals one at a time cost financial literacy expert Barbara O'Neill at least $1 million.
That's how much Ms O'Neill, a distinguished professor at Rutgers University in the US, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.
"I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could've had $2 million," Ms O'Neill says.
Too often, financial experts say, people want to attack their money goals one at a time: "As soon as I pay off my credit card debt, then I'll start saving for a home," or, "As soon as I pay off my student loan debt, then I'll start saving for retirement"."
People do not realise how costly the words "as soon as" can be. Paying off debt is a worthy goal, but it should not come at the expense of other goals, particularly saving for retirement. The sooner money is contributed, the longer it can benefit from compounded returns. Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.
"By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic," says Kimberly Zimmerman Rand , an accredited financial counsellor and principal at Dragonfly Financial Solutions in Boston. "If you can start saving today ... you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four."
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Fund-raising tips for start-ups
Develop an innovative business concept
Have the ability to differentiate yourself from competitors
Put in place a business continuity plan after Covid-19
Prepare for the worst-case scenario (further lockdowns, long wait for a vaccine, etc.)
Have enough cash to stay afloat for the next 12 to 18 months
Be creative and innovative to reduce expenses
Be prepared to use Covid-19 as an opportunity for your business
* Tips from Jassim Al Marzooqi and Walid Hanna
MATCH INFO
Uefa Champions League, last 16, first leg
Tottenham Hotspur v Borussia Dortmund, midnight (Thursday), BeIN Sports
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
