When Deutsche Bank floated NMC Health in 2012, it was at a gloomy time for the market.
Few firms were taking the IPO plunge, and the Middle East operator’s arrival in London gave hope that sentiment was finally improving.
Now, after devastating allegations of dodgy accounting by hedge fund Muddy Waters, it looks set to go down as one of the FTSE’s biggest embarrassments.
NMC gave blanket denials to MW’s claims but failed really to address the key questions.
Instead, it launched an “internal investigation”. Most blue-chip companies would hire a Slaughter & May or PwC for the job.
Not NMC. It went for a former FBI man, Louis Freeh, known for defending the likes of notorious tycoons Dan Gertler and Beny Steinmetz.
Then, last week, two key NMC shareholders had to sell 15% of the business because they’d been using their shares as security on other loans.
The lenders, one being Deutsche Bank, were plainly nervous of just how reliable the NMC security was.
Still, at least the founder-owner was solid in his big stake in the business, right?
Erm… wrong. Today we learn much of his stake “might” be owned by the same pair hit by margin calls last week. Could that, too, be pledged against other loans?
If NMC weren’t on our most blue-chip index, you’d laugh. But it is.
The authorities will be tempted to draw a veil over this affair once NMC gets taken over. They shouldn’t.
Broker Barclays, senior non-exec Jonathan Bomford and other Brits on the board must be fully investigated.
What, exactly, did they do to safeguard the UK shareholders who were paying their fees?
