Indian billionaire Dr. BR Shetty will be removed from board discussions at one of the companies he founded, the UAE-based healthcare conglomerate NMC, after he said he may have misreported the size of his stake, Bloomberg reported.
According to the report, the company, which runs a hospital chain in the UAE, has just asked Shetty not to participate in any board meetings until the issue about his stake is clarified.
The Indian entrepreneur is the chairman of the board of NMC and founder of financial services firm Finablr, the umbrella for popular brands such as UAE Exchange, Travelex, Xpress Money, Unimoni and Remit2India. Just last year, the business tycoon went public with Finablr by listing on the London Stock Exchange.
The company came under scrutiny recently following reports that Shetty may have misreported to the stock market the size of his stake.
Last December 17, American short-seller Muddy Waters published a report claiming that Shetty’s company allegedly underreported its debt and inflated the value of its cash balances.
“What we found is likely just the tip of the iceberg,” Carson Block, the founder of Muddy Waters, was quoted as saying.
NMC denied the claims, although it subsequently issued a statement, stating that it is conducting a legal review to determine the actual size of Shetty’s stake, as well as of the two other major shareholders. It added that the holdings may “have been incorrectly reported historically.”
With the review, Shetty and Vice-Chairman Khaleefa Butti Omair Yousif Ahmed Al Muhairi have reportedly been asked not to show up at any future meetings of the board until the matter is resolved.
The company will also decide on whether or not Shetty and Butti should remain as company directors, according to Bloomberg.
Since Muddy Waters’ claims went public, the shares of Shetty’s company plummeted, losing 45 percent of their value.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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