We are short NMC Health plc. We have serious doubts about the company’s financial statements, including its asset values, cash balance, reported profits, and reported debt levels. At the worst of times, the company has invested in large assets at costs that we find too high to be plausible – including from parties we believe are de facto under common control. This behavior gives rise to concerns about fraudulent asset values and theft of company assets. At somewhat better times, the company seems to “only” materially mislead, such as by trying to give investors the (false) impression it does not engage in reverse factoring, and by understating (we believe intentionally) lease debt.

Yesterday NMC issued the latest in a series of confusing disclosures about its controlling shareholders’ ownership and pledges when it disclosed that 19.0 million of its shares are potentially subject to undisclosed share pledges. We note that the FCA has announced it is probing these misstatements. In our December 2019 report, we stated that we suspect NMC has undisclosed debt. These recent disclosures and insider share sales reinforce our view.