Hopes for a rescue bid for scandal-struck Middle Eastern hospitals operator NMC Health were dashed today as private-equity giant KKR said it would not be bidding.
NMC was sent reeling in December by allegations from hedge fund Muddy Waters that it had been under-reporting its debts.
Then it emerged two of its controlling shareholders known as the bin Buttis had sold vast amounts of stock that had been pledged as collateral on other debts.
The shares dived, only for the scandal to worsen yesterday when NMC admitted founder BR Shetty’s large stake in the business may also actually be owned by the bin Buttis. Such an admission would normally have hit the share price again, but NMC accompanied yesterday’s statement with the announcement that it had received two takeover approaches, one from KKR and the other from a little-known firm called GK.
Today, however, KKR forcefully denied it would be bidding, leaving only GK in the running. That led to more concerns about overlaps in Shetty’s business interests, as GK, led by a businessman called Kamel Ghribi, has interests in his healthcare assets.
NMC shares tumbled a further 13% on the news, by 126p to 797p.
Evening Standard research shows three British non-executive directors, who apparently failed to spot any red flags, have picked up £2 million in pay since 2014. Questions are growing over what the trio, including an old-Etonian lord, did to pick up the problems.
Mark Tompkins, formerly of Allied Healthcare, was paid £240,000 a year as non-executive joint chairman. Jonathan Bomford, ex-Ernst & Young, was on £115,000.
Lord Clanwilliam was on £105,000. The peer, a former Conservative party donor and PR to the state of Bahrain, has served on controversial Russian and African boards.
Muddy Waters’ Carson Block said while the trio may not have been told of the intercompany loans and shareholdings, they apparently failed to ask enough questions. “if they had been doing their job they could have broken the glass on the alarm years ago.”
