An RNS from NMC Health (NMC) suggests that Dr Shetty’s holdings and others’ may not be all they appeared to be. This was accompanied by an RNS from Finablr (FIN) suggesting similar shenanigans may be on the cards regarding the same people. Both companies are trying to get to the bottom of it, but from my perspective it all stinks and I would not be hanging around to find out what the true position actually is with either. By way of background, I asked HERE whether Finablr was a house of cards after the company revealed that 56% holder BRS Investment Holdings 1 Limited – controlled by Finablr’s founder, the good Dr Shetty – had pledged its holding to its bank. Since then, Finablr’s shares have tumbled very heavily, which left me wondering HERE whether a margin call was on the cards, and what might happen. Clearly, if 56% of the company were to hit the market it would be a disaster for Finablr’s shareholders...
Now Finablr has announced: The Company has very recently been made aware of purported arrangements between Dr BR Shetty, His Excellency Saeed Mohamed Butti Mohamed Al Qebaisi and Khaleefa Butti Omair Yousif Al Muhairi which may be relevant to their respective interests in the Company's shares. The company will update in due course but NMC made a rather more detailed announcement, alongside a possible offer RNS, which is rather more worrying: The Company announces that it has been informed by its Joint Non-Executive Chairman, Dr. Bavaguthu Raghuram Shetty, that Dr. B. R. Shetty and his advisers are in the process of carrying out a legal review in order to verify the total interests of Dr. B. R. Shetty, his associated family members and his associated family holding companies in the Ordinary Shares of the Company, and that this review also has implications for the holdings and interests of H.E. Mr Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Mr Khaleefa Butti Omair Yousif Ahmed Al Muhairi. This suggests that the holdings and interests of Dr. B.R. Shetty, H.E. Mr Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Mr Khaleefa Butti Omair Yousif Ahmed Al Muhairi have been incorrectly reported historically to the Company and the market.
That seems to be naming the very same people and it seems to be saying the same thing at Finablr told us. But NMC goes further: The Company has been informed that to date the legal review, which is continuing, has identified the following matters as requiring disclosure and the below sets out Dr. B. R. Shetty's understanding of those matters, based on information currently available: 1. Share security: On 5 February 2020, Falcon Private Bank informed Dr. B. R. Shetty that it was transferring 4,800,000 Ordinary Shares in the capital of the Company from a Falcon Private Bank nominee account in the name of Dr. B. R. Shetty to First Abu Dhabi Bank. Dr. B. R. Shetty understands that it is the intention of First Abu Dhabi Bank to hold those Ordinary Shares in a First Abu Dhabi Bank nominee account in the name of Dr. B. R. Shetty. Dr. B. R. Shetty has not received confirmation that the transfer has been completed. Dr. B. R. Shetty has been informed that the transfer is being made in connection with security arrangements given by Dr. B. R. Shetty in favour of First Abu Dhabi Bank, and that those security arrangements relate to credit facilities made available by First Abu Dhabi Bank to a company associated with Dr. B. R. Shetty. Dr. B. R. Shetty and his advisers are investigating the details of and the legal basis for this transfer. The PDMR notification below gives details of such transfer……
Is the company associated with Dr. B. R. Shetty related in any way to BRS Investment Holdings 1, I wonder? Whatever, it appears that a slug of NMC stock had been pledged by Dr Shetty. Were we told about that? And if Dr Shetty appears unsure as to what has transpired, is it because the bank has claimed its security? Answers on a postcard. Further: Separately, Dr. B. R. Shetty understands that: (a) 5,141,348 Ordinary Shares in the capital of the Company are held in a second and unconnected nominee account with Falcon Private Bank that is in the name of Dr. B. R. Shetty; (b) these 5,141,348 Ordinary Shares in the capital of the Company are subject to a share pledge given by Dr. B. R. Shetty in favour of Falcon Private Bank, and (c) the share pledge relates to credit facilities made available by Falcon Private Bank to Dr. B. R. Shetty.
So Dr Shetty has pledged more shares in NMC to secure personal credit facilities? Were we told about that? Has the bank claimed the shares? And there is more: Memorandum of understanding: BRS International Holding Ltd (of which Dr. B. R. Shetty is the sole shareholder) has been holding 20,000,000 Ordinary Shares pursuant to a Memorandum of Understanding dated 31 May 2017 for H.E. Mr Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Mr Khaleefa Butti Omair Yousif Ahmed Al Muhairi. The legal review of the arrangements is ongoing. If the legal review confirms that the ultimate beneficial owners of these Ordinary Shares are H.E. Mr Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Mr Khaleefa Butti Omair Yousif Ahmed Al Muhairi and not Dr. B. R. Shetty (as the sole shareholder of BRS International Holding Ltd), this would result in a commensurate reduction of the publicly disclosed interests of Dr. B. R. Shetty, his associated family members and his associated family holding companies in the Ordinary Shares of the Company of 9.58% of the current issued share capital of the Company.
What I want to know is whether BRS was holding 20 million shares in order to pledge them as well! But if the actual ownership does not lie with BRS and Dr Shetty’s disclosed holding is therefore materially reduced…..hmmm. Oh, hang on: Of these 20,000,000 Ordinary Shares, Dr. B. R. Shetty has been informed that (a) 6,500,000 Ordinary Shares may have been transferred from a First Abu Dhabi Bank nominee account in the name of BRS International Holding Ltd to Al Salam Bank, Bahrain and such shares may also be subject to security arrangements; and (b) up to a further 2,600,000 Ordinary Shares may have been transferred from a First Abu Dhabi Bank nominee account in the name of BRS International Holding Ltd to United Arab Bank, United Arab Emirates and such shares may also be subject to security arrangements. Dr. B. R. Shetty and his advisers are investigating the details of and the legal basis for these possible transfers and security arrangements.
So they had been pledged? Did we know about that? And worse, it appears to me that they have been claimed as well. The RNS goes on to tell us: The Board has asked Dr. B. R. Shetty and Mr Khaleefa Butti Omair Yousif Ahmed Al Muhairi to absent themselves from further Board discussions until clarification of these matters and pending a board decision about their ongoing roles as directors of the Company. Oh dear – so they’ve been suspended! Now then: who thinks that a similar can of worms will be unearthed at Finablr in due course, given its announcement? Whatever the truth - and it is hard to draw a firm conclusion - this stinks to high heaven.
And given the above, is it only a matter of time before questions are asked of the accounts of both companies – as appears to be the case with regard to the bear attack on NMC by Muddy Waters. Indeed, the great Carson Block of Muddy Waters has commented: “Today’s bizarre disclosures about even more pledges and debt validate that the cockroach theory is alive and well - what we found is likely just the tip of the iceberg. As for the notion that NMC might receive private equity bids, it’s hard for us to believe they would survive due diligence.” Indeed.
Filed under: NMC Health, Finablr, ITM Power, Bidstack, Marks & Spencer, Tandem Group, Muddy Waters
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