The administrators of NMC Health have questioned the firm’s founder, BR Shetty, as part of their inquiries into how the FTSE 100 hospital operator collapsed with billions of dollars of undisclosed debts.
Alvarez & Marsal has begun interviewing directors, shareholders and staff of the private hospital operator as part of its efforts to establish its true financial position and salvage NMC’s assets for creditors.
Mr Shetty, an Indian businessman who founded the firm in the United Arab Emirates in the mid-Seventies, is understood to be one of the people already interviewed.
NMC plunged into administration in April after being hit by confusion over the ownership of its shares, billions of dollars of secret debts and suspected fraud.
Mr Shetty vowed in April to clear his name and said he was the victim of “serious fraud”. He blamed company executives for the collapse of his business empire, which also includes Finablr, the struggling payments firm.
NMC scandal: the key players
BR Shetty
Indian-born businessman BR Shetty founded NMC Health in 1974 after working as a pharmaceuticals salesman in Abu Dhabi.
The hospital operator is the largest in the United Arab Emirates and listed on the London Stock Exchange in 2012.
Using NMC’s success as a springboard to pursue other business ventures, Shetty went on to found and invest in a string of companies, most recently setting up financial services company Finablr.
The 77-year-old father of four has kept family close when it comes to running his business empire. Each of his children were put to work for a week at one of his companies during their summer holidays, while his wife, Chandrakumari Raghuram Shetty, helped set up NMC and is the firm’s group medical director.
Shetty’s wealth, an estimated $3.2bn in 2019 according to Forbes, has seen him develop a taste for the finer things in life, particularly vintage cars – his favourite among his personal collection being a Morris Minor 1000.
Speaking to local reporters last year, Shetty said: “The thrill of speed and freedom makes me love cars.”
He has also splashed out on a private jet and two entire floors in the world’s tallest skyscraper, the Burj Khalifa.
The true value of Shetty’s personal fortune is now unclear after NMC admitted it does not know who owns all of its shares.
A person close to the administrators said they are “only in the foothills of their Himalayan expedition” to unpick the web of transactions that brought down NMC.
The investigation will involve a review of hundreds of thousands of accounting entries, according to a document filed at Companies House last month.
Administrators and advisers racked up £722,391 in costs, including £380,000 for lawyers at DLA Piper, in the 18-day pre-administration period.
Abu Dhabi Commercial Bank, one of NMC’s major creditors, has provided $1.5m to bankroll the administration with more expected to follow under a funding agreement.
NMC’s subsidiaries, which continue to operate, are expected to shoulder some of the investigation costs, the administrators said.
A slew of City firms, including the London Stock Exchange, Deloitte and FTI Consulting could lose hundreds of thousands of pounds of fees owed to them by NMC when it went bust.
The exchange, where NMC’s listing was suspended in February, is owed £186,000. Deloitte is owed more than £56,000 while FTI is owed £200,000.
Alvarez & Marsal said NMC may have drawn down materially less than the $7.4bn of debt facilities identified so far.
Richard Fleming, one of the administrators, said his firm had inherited a complex situation and is assessing whether it can make legal claims or take other action.
He said: “Our primary objectives following our appointment have been to ensure continuity of patient care, stability for staff and suppliers, protection of assets and immediate financial security for NMC’s operating companies.”
Mr Shetty declined to comment.
