Question

NMC Case Study (NO Problem if you copy paste from internet) (You must search through the Internet to find information regarding this case)

NMC Medical Group: It is a private medical group that has many hospitals and medical centers in the Emirates and is also listed on the London Stock Exchange.
Maddy Waters - a short sale company - said it had "serious doubts" about the financial condition of the NMC medical group and the amount of its profits and declared debts, according to a Reuters report on December 17. The company has suffered from a financial crisis and accumulated debts that have not been disclosed to shareholders and the Board of Directors, and the company recently revealed it.
The list of creditors includes 80 local, regional and international financial institutions that have lent to the NMC Healthcare group.

As a distinguished financial expert, answer the following questions using a professional investigative investigation that relies heavily on reliable figures, facts and sources:
1- Ensure that the allegations against the company are correct
2- write in detail a list of the accusations that could be directed against the company’s board of directors?
3- write in detail a list of criticisms that could be directed at the 80 institutions crediting the company
4- Discuss the default made by the auditor
5- Who are the responsible governmental and regulatory authorities in each of Abu Dhabi, where the company is based, and the London Stock Exchange, where the company's shares are traded?
6- A judge has been appointed to investigate financial crimes. If you are the judge, make your opinion corroborated by facts and evidence

Answer 1

1- Ensure that the allegations against the company are correct

On review of the financial statements, it is clear that the company does not have cash and most of the balances are mis-stated. This clearly proves the wrong doing by the management and proves that allegations are correct.

2- write in detail a list of the accusations that could be directed against the company’s board of directors?

The Board of Directors have failed to perform their fiduciary duties i.e the Directors can be accused of negligence in delivering their roles and responsibilties. They should have reviewed the financial statements more accurately as it would have reflected the mis doing of the management.

3- write in detail a list of criticisms that could be directed at the 80 institutions crediting the company

List of Criticism against the 80 institution

1, Collision between the institution and company to defraud

2. Not monitoring the working capital, debtors collection, inventory of the company

3. No co-ordination between the institutions, as the company hhas been borrowing from one institution to pay another and have been doing round tripping of funds.

4. The instituns could have found out the financial status if they had analysed the financial statement properly

5. Not doing a thorough Know your Customer process and anti money laundering monitoring

4- Discuss the default made by the auditor

It is reported that most of the fraud is committed by the management by forging the signatures of the promoter etc. The auditor should have checked the authenticiy of various documents and should have obtained independent confirmation. They should have disclosed the precarious financial position in their audit report by way of an qualified audit opinion.

5- Who are the responsible governmental and regulatory authorities in each of Abu Dhabi, where the company is based, and the London Stock Exchange, where the company's shares are traded?

The UAE Government, The Abu Dhabi Securities Exchange, The ADGM Financial Services Regulatory Authority, The Financial Conduct Authority, UK,

6- A judge has been appointed to investigate financial crimes. If you are the judge, make your opinion corroborated by facts and evidence

Bsed on information available so far, I would like to present below the facts.

The promoter is not admitting to any of the crime and is blaming the management. However knowing this his critical such as CCEO, CFO, COmpliance and audit staff etc are close to him, these things would not have happened without the explicit knowledger and concurrence. I think the management team along with the Board of Directors should be taken for custodial interrogation, to ascertain the sequence of events and then present to the court so as to make an opinion.