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| Name | BR Shetty resigns - UAE's NMC Health scandal |
| Video Uploader | Video From Arabian Business |
| Upload Date | This Video Uploaded At 17-02-2020 07:42:19 |
| Video Discription | After chairman BR Shetty was removed from the board of NMC last week, Vice Chairman Khaleefa Al Muhairi has also stepped down from his position. But there was one man that took down this healthcare giant single handedly. Today, I’ll tell you a little bit about him and his 34 page report on NMC. He's been called the world's most feared short seller, causing nearly a dozen companies to be shut down or delisted. Now, Muddy Waters' Carson Block is digging into UAE-based healthcare operator NMC Health. Just one controversial post set in motion a series of events that wiped nearly $2 billion off the value. So what happened? On December 19, shares of NMC Health fell the most on record after it was targeted by Block, the founder of San Francisco-based Muddy Waters Capital. In a 34-page report, Block said he had “serious doubts” about NMC Health’s financial statements and concerns over possible “fraudulent asset values and theft of company assets,” and disclosed a short position in the company. NMC Health hit back, calling the report “baseless” and announcing an independent review that would focus on the group’s cash balance as of December 15, 2019. What were the signs? His first red flag was the company’s use of reverse factoring, of which many investors were unaware. Unlike traditional invoice factoring, reverse factoring is a form of borrowing where a bank or finance company commits to pay a firm’s invoices to suppliers at an accelerated rate in exchange for a discount, though the payments do not class as debt. In December analysts and investors expressed unease around the company’s raising of hundreds of millions of dollars of off-balance sheet debt to fund new hospitals. Last year, it looked to raise a €200m ($223m) loan through a chain of special-purpose vehicles, including a Dubai entity, to fund the construction of hospitals across the Middle East. The majority of NMC’s reverse factoring, including the efforts to raise the €200m loan, was arranged by London-based Blackstar Capital which specialises in raising working capital finance. This unconvcentional method was the 2nd flag for Block. It remains to be seen whether NMC’s own review will pass scrutiny. In a public statement, the company said it is “confident that this review, when complete, will be entirely confirmatory of the disclosures provided by the company to date.” |
| Category | Science & Technology |
| Tags | NMC | Carson Block | Muddy Water | business | scandal | watergate | UAE | GCC | Gulf | money | healthcare | corruption | BR Shetty | hospital |
