NMC Health stock suspended, dropped from FTSE 100 after share price slump

The healthcare operator saw its stock suspended last week and relegated from the FTSE 100 after its share price fell by more than 60% following an independent review that revealed potential financial discrepancies.

NMC Health saw its stock suspended from trading last week after the UK Financial Conduct Authority (FCA) opened a formal enforcement investigation into the company.

The healthcare operator was also relegated from the FTSE 100 after its share price fell more than 60% in the wake of accusations of financial impropriety in December by the short seller Muddy Waters.

NMC Health suspended trading at £10 a share on 27 February.

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NMC Health relegated to FTSE 250 on market return

According to a statement by London Stock Exchange (LSE), when trading resumes on NMC Health it will be a member of the mid-cap FTSE 250 index.

Travel operator TUI and DIY retailer Kingfisher will also be relegated from the FTSE 100 and join NMC Health on the mid-cap index, with the trio replaced on the blue-chip index by Fresnillo, Intermediate Capital Group and Pennon Group. The index shake-up will officially occur on 23 March, according to LSE.

You can go long or short NMC Health when trading resumes with IG using derivatives like CFDs.

NMC Health fires CEO over secret loans

Last week, NMC Health fired its CEO Prasanth Manghat after an investigation revealed that the company had issued loans to businesses owned by its major shareholders without the board’s knowledge.

The loans provided by NMC Health were used by businesses owned and controlled by the company's former joint chairman Bavaguthu Shetty and former vice-chair Khaleefa Butti Omair Yousif Ahmed Al Muhairi. Under the arrangements, suppliers to companies owned by Shetty and Muhairi were paid by certain credit facility providers.

‘Having been made aware of these arrangements, the board has determined that the facilities will no longer be made available for further supplier financing with the aim that the relevant balances should be unwound in line with existing terms,’ NMC Health said in a statement.

The news adds weight to allegations made by short seller Muddy Waters, which raised doubts about the healthcare operator’s financial statements, including reported profit and the level of debt on its balance sheet back in December.

‘We are speaking to the company and its advisers... about what steps may be required,’ an FCA spokesperson said.

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