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Tuesday, May 17, 2022

NMC administrators sue EY in UK for alleged audit negligence

NMC administrators sue EY in UK for alleged audit negligence

The administrators of NMC Health PLC have filed a lawsuit against EY in the United Kingdom for alleged negligence on the audit work it did for the troubled hospital operator between 2012 to 2018, a spokesperson said.
NMC, which used to be listed in London, ran into trouble in 2020 and went into administration after it disclosed more than $4 billion in hidden debt.

NMC's troubles began in late 2019 when short-seller Muddy Waters questioned its financials, which led to a sharp fall in its share price.

"As part of our wide ranging investigation into the situation, we have looked at the role of the auditors and have now launched formal legal proceedings against EY in the UK for audit negligence with regards to its work with the company between 2012 and 2018," a spokesperson for Alvarez and Marsal, the joint administrators for NMC Health PLC, said in an email.

"As administrators, we have an obligation to maximise returns for creditors and this action is part of those wider efforts."

EY said in an email it was aware of the claim submitted to the court by the administrators of NMC Health Plc and will defend the claim "vigorously."

The two statements did not disclose the amount of damages Alvarez and Marsal is seeking in the lawsuit, but Sky News reported the claim filed in London was for $2.5 billion.

The core operations of NMC, the largest private healthcare provider in the United Arab Emirates (UAE), come out of administration in Abu Dhabi in March and are now part of a new company.

However, the UK-registered NMC Healthcare PLC and UAE-registered NMC Healthcare Ltd still remain in administration while restructuring and legal issues related to these entities are resolved.
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