FCA censures NMC Health for understating debt

The Financial Conduct Authority said on Friday that it has censured failed hospital operator NMC Health for understating its debt by up to $4bn.

The FCA said in a statement that NMC - which entered the FTSE 100 in 2017 - misled the market between March 2019 and February 2020, publishing a series of financial statements and clarification announcements which contained "materially inaccurate" information about its debt position.

The regulator said it found that UAE-based NMC had been operating dual sets of accounting records.

NMC was placed into administration in April 2020. With co-operation from the company’s administrators and international partners, the FCA secured material "which made clear that the picture it presented to the market was inaccurate".

Steve Smart, joint executive director of enforcement and market oversight at the regulator, said: "The concealment of NMC’s debt position and subsequent collapse has left creditors including investors out of pocket. While the administrator has sought to recover any value and distribute to creditors, the FCA has sought, through the public censure, to explain how and why investors were misled to ensure that lessons are learnt.

"We have engaged with law enforcement agencies abroad and will continue to provide any further support they may request to help combat financial crime."

The FCA said it has imposed a censure rather than a financial penalty, as it’s expected that no funds will remain after creditor claims have been met.