More than three years after the collapse of NMC healthcare group, the financial watchdog of the UK has found that the hospital operator had committed market abuse by understating its debts by as much as $4 billion.

The UK’s Financial Conduct Authority (FCA) censured the former FTSE-100 company based in the UAE on Friday for misleading the market but stopped short of fining it as no funds are expected to be left at the business once outstanding debts to creditors are paid out.

The FCA, following a three-year investigation into the scandal, slammed NMC for publishing “materially inaccurate information about its debt.” The regulator found that NMC ran “dual sets” of accounting records to conceal the true scale of its debts. “The financial statements disclosed publicly misled investors by understating its debts by as much as $4 billion,” the watchdog said.

Stephen Smart, joint executive director of enforcement and market oversight at FCA, said: “The concealment of NMC’s debt position and subsequent collapse has left creditors, including investors, out of pocket.

NMC Health, founded in Abu Dhabi 1974 by Indian entrepreneur BR Shetty, was a London-listed healthcare operator running hospitals in the Middle East. It entered the FTSE 100 in 2017 after rapid growth and was valued at £8.6 billion at its peak in 2018.

The entity’s collapse began in late 2019 when the short-seller Muddy Waters published a report raising questions over its financial reporting. In early 2020, the company fired its chief executive Prasanth Manghat and confirmed financial discrepancies, eventually forcing itself into administration. The healthcare group came out of administration in March 2022 following an agreement with creditors on a restructuring plan.

Shetty, whose wealth was estimated by Forbes to be around $4 billion in 2019, continues to deny any wrongdoing and maintains that he has been the victim of fraud. He has sued former top executives of his companies, banks and auditor EY, claiming that they were responsible for the alleged complex multi-billion-dollar fraud. He is seeking $8 billion in damages.

In July 2023, NMC filed a $4 billion lawsuit against Shetty and Manghat, related to allegations of fraud which led to its fall in 2020.

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