NMC Health PLC said it was retaining the services of former U.S. Federal Bureau of Investigation Director Louis Freeh to investigate claims made by U.S. short-selling firm Muddy Waters LLC that accused the company of a number of deficiencies.
The Abu Dhabi, United Arab Emirates-based company has been shrouded in controversy since the report was released, with two major shareholders of the healthcare company selling a part of their holdings following its release. NMC began an independent third-party review of its business after Muddy Waters highlighted areas of concern at the company, though it denied any wrongdoing on its part, calling the report false and misleading.
Muddy Waters' report examined NMC Health's asset values, cash balance, reported profits and debt levels, and it highlighted possible overpayment for acquisitions, inflated margins and understated debt, along with instances of poor corporate governance.
NMC Health said it plans to issue a report on Muddy Waters' claims, particularly those of a financial nature, ahead of its 2019 financial results. The company's stock price has taken a hit since the release of the report, but has been recovering since NMC Health announced measures to investigate the claims, including hiring Freeh. NMC Health was up 8.01% in trading to £15.57 per share as of 8:11 a.m. ET on Jan. 17, 2020.