The Demise of NMC Health


A story with a scandal never seen before. Unprecedented fraud. The collapse of a multibillion company. And it all circles the largest provider of healthcare in the UAE: NMC Health.

It started of as a small clinical pharmacy, founded by BR Shetty when he moved to Abu Dhabi from India in 1973. The entrepreneur transformed the clinic into an international corporation riding an economic boom. NMC became a firm with 200 facilities in the UK, Spain and Saudi Arabia as well as Abu Dhabi. Patient numbers were in the millions and clinic numbers entered into the thousands.

NMC Health raised about £117 million in an initial public offering (IPO) on the London Stock Exchange executing on its major expansion plans, and thus went public in 2012. The shares appreciated significantly since the floating and NMC’s market cap stood at a proud US$10 billion. Business was blooming with investors gathered like moths around a flame, even their balance sheets got healthier every year. Today, their situation presents a stark contrast to what they once were.

In December, investment company Muddy Waters Research released a report to shed light on NMC Health’s corrupt balance sheet:

NMC Health’s behaviour gives rise to concerns about fraudulent asset values and theft of company assets… We are unsure how deep the rot at NMC goes, but we do not believe that its insiders or financials can be trusted

Muddy Waters Research

Muddy Waters Research are a controversial firm: famous for taking short positions on a stock where they make money from the price going down and then releasing a report on ‘corrupt suspicions’. Irrespective of the eventual investigation’s results, their reputation precedes them. The market trusts what Muddy Waters report and the stock takes a hit. The winners? Sometimes the alleged, sometimes not. But always Muddy Waters Research.

Their CEO, Carson Block, has been described by Bloomberg as “one of the most successful bears” in the market today. Though his way of doing business is contentious at best, he is an entrepreneur with many successful detections of fraud, like big players Sino Forest, NQ Mobile, Focus Media and recently Luckin Coffee.

The accusation on NMC led to an eruption of investment banks and traders selling their shares, as well as many others shorting the stock. This massive increase in supply in shares led to a collapse in the stock price. When NMC failed to adequately answer allegations with valid proof that suggested otherwise, the panic selling was replaced by a reasonable dumping of stock. The shares were worth a few cents on the dollar, which left their market cap decimated. In February, the stock was suspended from the exchange and shareholders saw their risk completely wiped out.

“The bigger they are, the harder they fall.” Being a FTSE 100 company, there was a very keen investigation into what this all really meant. Freeh investigators, led by ex-director of the FBI: Louis Freeh, are looking into the books and have already detected a serious level of fraud, up to US$6 billion. The alleged fraud includes false accounting, forged invoices and kickbacks. The operation appeared to have been executed by a group of about 20 executives across NMC, Finablr and some of Mr Shetty’s personal businesses. They were all extracting NMC’s profits for personal gain.

They fooled everyone!

Freeh Investigators
BR Shetty, founder of NMC Health

Shetty’s take on this is of sheer surprise. He feels betrayed from some of his closest colleagues who he trusted to promote to CEO’s of NMC’s many subsidiaries. Upon the release of the report, Shetty was quickly forced into resignation and his few statements afterwards suggest his feelings are of betrayal, not guilt. Though there is speculation that his return to India was a criminal ‘fleeing the country’, it is being assumed at the moment Shetty is innocent. He said a few weeks ago:

To see everything that my family and I have strived to build over the past 45 years eroded over the course of a few short months, and mainly due to the misconduct and wrongdoing of people I put so much trust in, saddens me beyond words. It has also left my entire family in a perilous financial position.

My greatest regret is for the thousands of hardworking employees in the companies we established who are now enduring extreme uncertainty and hardship, especially during the current public health crisis. It also pains me to see the damage caused to my business partners, shareholders and other stakeholders who we have worked with for so long.

Dr B.R. Shetty

In this ever-threatening pandemic, the fall of major healthcare providers makes the situation more unpredictable. NMC are likely to be pushed into bankruptcy, with billions of debt owed, but they hope to keep hospitals open for as long as possible. It is ironic doctors on the front line are seeing massive uncertainty along with their increased workload when their fraudulent superiors will have large cash reserves to lean back on.


  1. Simeon Kerr “NMC founder blames executives for suspected fraud”
  2. Simeon Kerr “NMC Health collapse leaves battle lines drawn”
  3. Nicolas Parasie “How a Gulf Hospital Chain Unleashed Scandal in London”
  4. N Parmar “NMC Health IPO raises £117m on London Stock Exchange”
  5. Indulekha Aravind “BR Shetty: The staggering rise and incredible fall of a billionaire”
  6. Dr B R Shetty “Statement from Dr B.R. Shetty”


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