NMC Health PLC, a healthcare services provider, is under scrutiny regarding its accounting practices, the Financial Times reported, citing a report published by U.S. hedge fund Muddy Waters LLC.
The Abu Dhabi, United Arab Emirates-based company owns and manages about 200 healthcare facilities across 19 countries. NMC Health saw a decline of £1.8 billion in market value following the release of the Muddy Waters report.
Muddy Waters' report examined NMC Health's asset values, cash balance, reported profits and debt levels and issued warnings about a number of areas of concern, according to the FT. Specifically, the report highlighted possible overpayment for acquisitions, inflated margins and understated debt, along with instances of poor corporate governance.
The investment research firm targeted NMC Health's growth strategy and pointed out investments in large assets at unreasonable costs including transactions with parties that are under common control.
NMC Health declined requests for comment by the news agency.
Muddy Waters also raised doubts regarding NMC Health's margins, saying they appear "too good to be true" when compared with similar companies focused in the United Arab Emirates.
The company is among the topmost shorted stocks on the FTSE 100 index, with almost a quarter of its outstanding shares owned by public investors on loan for use by hedge funds, the FT reported.
Shares of NMC Health were down 32.4% to £1,747.50 as of market close Dec. 17.