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NMC Health quagmire got complicated thanks to Czech activists

By on April 19, 2021 0

The crisis that engulfed NMC Health took another turn on Wednesday after a Czech activist investor said he would not take a strategic stake in healthcare operator FTSE 100 unless he brings back the founder and co-chair Bavaguthu Raghuram Shetty, just days after the Indian billionaire. leave the board.

Krupa Global Investments (KGI), based in Prague, led by Chairman Pavol Krupa and owner of one million shares of NMC UK: NMC,
said the current situation was “not in line with its significant equity investment strategy”, but said it was ready to “renew acquisition negotiations [a] strategic stake ”if Shetty and the eminent Emirati Butti family return to senior management.

He added: “Mr. BR Shetty and [the] The Butti family built the NMC Health company on the basis of their good know-how and good relationships in [the] Middle East, KGI therefore considers the recent resignations of these senior management representatives to be unacceptable and this decision is not correct in our opinion.

KGI said earlier in February that it had held talks with a “strong private equity group” to take a strategic stake in NMC or “secure funding” for Shetty, but did not name the buyout company. .

Shares of NMC, the worst performing on the FTSE 100 index since the start of the year, fell 4.5% on Wednesday at 10:10 a.m. GMT in London. NMC is the largest healthcare provider in the Middle East.

Shetty stepped down as co-chairman of NMC on Monday after the company said it misstated the size of its stake. Last week, the company revealed that Shetty’s participation and those of his two Emirati partners – Saeed Bin Butti Al Qebaisi and Khalifa Bin Butti Al Muhairi – had also been “wrongly reported”.

British regulators have opened an investigation into the size of their holdings.

On Tuesday, NMC said its board “remains disappointed” with the disclosures made by Shetty and urged its advisers to “check the correct legal position with respect to its ownership of common stock without further delay.”

NMC was in crisis since December 2019 when US short seller Muddy Waters, led by Carson Block, launched a 34-page report raising “serious doubts” about the group’s finances. NMC has denied the allegations and has recruited former director of the Federal Bureau of Investigation Louis Freeh conduct an independent investigation.

Responding to KGI’s statement on Wednesday, Block said: “It is clear that the resignations have ruined their [Krupa’s] desperate strategy of trying to get the headline up by press release. In any case, it would only have been a “strategic issue” if they had had something to offer the company. They don’t.

KGI sparked a Twitter feud with Muddy Waters when the Czech activist said it was getting ready to file a complaint with the UK Financial Conduct Authority and the US FBI against Muddy Waters.

Krupa had alleged that Muddy Waters published “misleading and manipulative information” about companies like NMC Health and Burford Capital.

Muddy Waters, which is run by Carson Block, hit back at Krupa’s allegations in a tweet, saying, “Muddy Waters Capital LLC wants to formally respond to the accusations publicly leveled against it today – through a fund no one has ever heard of. speak.

The tweet added: “Stupid is also stupid.”

On Wednesday, Krupa said that in a few days he would “present the results of our meeting with NMC and our strategy for the future in an open letter to all shareholders.”

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