By Saeed Azhar
DUBAI (Reuters) – Abu Dhabi Commercial Bank <ADCB.AD> said on Wednesday it had begun criminal proceedings in Abu Dhabi against an unspecified number of individuals in relation to hospital operator NMC Health <NMC.L>, which was placed in administration last week.
“ADCB confirms that it has initiated criminal legal proceedings with the Attorney General in Abu Dhabi against a number of individuals in relation to NMC Health Group,” the bank said in a statement, which did not name the individuals.
It said that the legal action was consistent with the objective of protecting its interests after administrators for NMC Health said on Tuesday they had replaced its board and asked ADCB to lead a steering group to discuss cutting its debts.
“ADCB continues to work closely with other creditors and the joint administrators to ensure continuity of NMC Health’s operations and a rapid recovery of the business,” the bank said.
NMC Health was founded in the mid-1970s by BR Shetty who built it into the largest private healthcare company in the United Arab Emirates.
In February, Shetty resigned as the non-executive chairman and board member after short-seller Muddy Waters questioned its financial statements, prompting weeks of turmoil. Shares in NMC Health have been suspended since late February.
A spokesman for Shetty had no immediate comment.
ADCB is the biggest lender to NMC Health, whose shares have shed more than half their value since December and which raised its debts to $6.6 billion after identifying $4 billion more debt on its books than it had previously disclosed.
The High Court in London last week placed NMC Health into administration following an application from ADCB, after NMC failed to reach a deal with its creditors.
ADCB, which has $981 million in exposure to NMC Health, is among the major UAE lenders who have lent to the company.
Credit rating agency S&P downgraded NMC Health’s rating to ‘D’ from CCC because the company had missed interest payments and was placed under administration.
“You might remember that the company asked for an informal standstill a month ago and didn’t pay any of its interest over the last month,” Sapna Jagtiani, a Dubai-based analyst for S&P said at a news briefing.
“But now at least with the administrators coming in, the way forward from here is likely restructuring or even liquidation of some assets. For us, of course, the rating stays at D for a while before we hear a concrete plan,” Jagtiani added.
(Additional reporting by Yousef Saba; Editing by Alexander Smith)