NMC Health, the UAE-based hospital operator, has withdrawn its London lawsuit against auditor EY, seeking nearly £2 billion plus interest. The lawsuit, which alleged negligent audits, was dropped this week according to a court order, ending a high-profile legal battle that began in May of last year. NMC Health operates a network of hospitals and clinics, primarily in the United Arab Emirates, providing a range of healthcare services. The company was once a FTSE 100 constituent before its collapse in 2020.
The administrators of NMC initiated the lawsuit following the disclosure of over $4 billion in hidden debt, which led to the company’s downfall. The claim focused on audits conducted between 2012 and 2018, during which EY provided unqualified opinions on the accuracy of NMC’s accounts. NMC had sought £1.94 billion, mainly related to undisclosed guarantees.
The trial concluded in October, but before a ruling could be issued, NMC withdrew its claim, as stated in the court order dated January 29. The order specifies that “there shall be no order as to the damages claimed or as to the costs of the claim”, with no additional details provided. Neither lawyers representing NMC’s administrators nor EY have issued immediate comments regarding the withdrawal.
Alvarez & Marsal, the administrators for NMC, had accused EY of failing to detect a significant fraud perpetrated by NMC’s major shareholders. EY, however, argued during the trial that NMC’s own senior management had manipulated the accounts and concealed the fraud from the auditors. NMC Health listed in London in 2012 and joined the FTSE 100 in 2017, before short-seller Muddy Waters questioned its financials in December 2019 sending NMC’s shares tumbling by almost a third in a day.
