Several concerns have been raised around the practices taken by NMC Healthcare which led to the big scale fraud of over $6 billion dollars.
The financial scandal surrounding NMC Healthcare has taken the financial world by storm and there is currently an ongoing investigation into the scandal.
The Abu Dhabi Commercial Bank has been reviewing the governance practices within the company which would lead to finding out what actually went wrong.
The timeline to NMC’s downfall:
- NMC was founded in 1975 by Dr BR Shetty - an Indian entrepreneur who had emigrated to the UAE.
- In 2012, the company made its way onto the FTSE 100 which was a great success for Dr Shetty and also the market of the UAE.
- In December 2019, Muddy Waters noticed inconsistencies in the company’s accounting and raised concerns over possible fraud and theft.
- This then led to an investigation in February 2020 by the Financial Conduct Authority (FCA). NMC was temporarily suspended from trading on the FTSE 100 and the CEO of the company was removed from his position.
- NMC had to admit to fraud of $2 billion which then increased to $6 billion.
- Abu Dhabi Commercial Bank, one of its biggest creditors, filed a criminal complaint against NMC for $1 billion of owed funds.
- By the end of April 2020, NMC was permanently delisted from the FTSE 100.
It has been discovered that NMC’s Independent Directors lacked financial expertise in 2018. The Audit Committee of 2018 had four members - one of them had left early in the year and was the only one with any sort of financial experience.
To add more, the last appointed chairman of the Audit Committee was not a qualified accountant and had not worked in any principal financial position before. So, he did not have financial expertise to govern the Auditing Committee.
It then becomes clear that the Board’s lack of financial expertise and lack of financial knowledge from the Audit Committee chairman must have played an important role in the downfall of the company.
If you are interested in finding out more about this investigation in more detail then click here.
Are you on the lookout for a new job? Then register with Odyssey Recruitment today and we could help you find your dream job.