Health

Secret records found of alleged NMC fraud, court told

June 10, 2025, 6:15 PM

At its peak in 2018, Abu Dhabi's NMC was valued at £8.6 billion on the London Stock Exchange, with operations in 19 countries

NMC Health collapsed in 2020
Alvarez & Marsal suing auditor EY
Claim exceeds $2.7bn

Administrators for Abu Dhabi-based NMC Health found internal “cheat sheets” showing the true condition of the company’s finances and detailing “significant payments” to people including founder BR Shetty, a UK court has heard.

NMC collapsed in 2020 with debts exceeding £3 billion ($4.1 billion). Administrator Alvarez & Marsal is suing big four accountancy firm EY for alleged negligence in its auditing of the healthcare group.

The claim, which is being heard in London’s High Court until October, is expected to be in the region of £2 billion ($2.7 billion).

At its peak in 2018, NMC was a FTSE 100 company valued at £8.6 billion on the London Stock Exchange, with operations across 19 countries.

A&M was appointed in April 2020 when NMC unravelled following a report by US short-seller Muddy Waters. NMC and its founder, Indian tycoon BR Shetty, claim to be victims of a massive fraud that led to the company’s demise and wiped out investors.

EY claims in its official media statement that it too is a victim of the “complex, pervasive and collusive fraud”. “Responsibility lies squarely with its perpetrators, including NMC’s owners, directors and the treasury and finance team”, the firm said in a statement.

“The case is without merit and the full extent of this unprecedented fraud will be exposed during the course of the trial,” the accountants said.

A&M managing director Julian Jones, who led a team of 40 forensic accountants investigating the case, was giving evidence last week. He told the court that NMC’s financial figures had been misstated over several years.

His team discovered misuse of the company’s ledger account and other “accounting manipulations” to conceal information, Jones wrote in his witness statement, seen by AGBI.

The A&M team found spreadsheets which differed from NMC’s as-reported financial statements, which the forensic accountants referred to as “cheat sheets.”

Aidan O’Rourke, partner at Quinn Emanuel, the law firm which is acting for NMC, said that EY was NMC’s auditor for all eight years of its time on the LSE.

“During that time EY missed several billion dollars in borrowing that was recorded in NMC’s accounts but not reported in its published financial statements,” O’Rourke said.

He added that EY never obtained access to the full books and records of the company and instead audited extracts of NMC’s general ledger.

“NMC is confident in its audit negligence claim against EY, and that the trial will lead to a significant recovery for NMC’s creditors,” he said.

In its opening submissions to the court last month, EY sought to distance itself from its Middle East branch, saying “documentation of the work it was doing left something to be desired”.