Regulator to investigate Ernst & Young's handling of audit
Britain's accounting regulator has opened an investigation into Ernst and Young's audit of hospital operator NMC Health that was placed into administration in April following allegations of rampant financial irregularities amid a debt pile of $6.6 billion.
The Financial Reporting Council, which operates the UK's "corporate governance code" designed to underpin trust in the way companies are run, said on Monday it opened an investigation on April 15 into the audit by EY of the financial statements of NMC Health for the year ended December 31, 2018.
EY said it has been notified of the FRC's intention to conduct an investigation into the audit of NMC Health.
"We will be fully cooperating with the FRC during their enquiries. It would be inappropriate to comment further at this time," it said in a statement.
Shares in NMC, which became the first Abu Dhabi company to list in London in 2012, were suspended on the London Stock Exchange after the company revised its debt position to $6.6 billion, well above earlier estimates.
The healthcare provider, which operates the largest hospital network in the UAE, has been bedevilled by allegations of incorrect finances and inaccurate reporting of major shareholders' stakes ever since US short-seller Muddy Waters targeted the company last year.
NMC's founder BR Shetty and five of its top former officials are facing charges of fraud and forgery in a criminal complaint filed by its largest creditor Abu Dhabi Commercial Bank with an exposure of Dh3 billion.
Shetty responded to the charges by admitting on April 29 that "serious fraud" had taken place and accused his former colleagues for the crime after what he described a "forensic probe" by his advisors.
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