Government-affiliated insurer, National Health Insurance Co (Daman), has stepped in to pay the February 2020 salaries of employees of scandal-hit NMC Health, touted as the UAE's largest private healthcare company.
The move by Abu Dhabi-headquartered Daman, which is 80%-owned by Abu Dhabi’s government and the rest by Munich Re, is seen as an intervention by the oil-rich emirate.
“Daman’s relationship with its partners is governed by regulatory guidelines and agreements that stipulate how and when payments are made,” according to a company statement. “Daman complies with all standards and agreements.”
All other insurers' payments meant for NMC are now suspended at the banks which have tightened their exposures to the healthcare operator.
NMC will need all the support from local health insurers to ensure it continues to have the same level of patients coming to its facilities, reported Gulf News. Any move by even a few insurers to “divert” care seekers to other healthcare providers could be detrimental to NMC.
The healthcare group, also headquartered in Abu Dhabi, is the first company from the emirate to list on the London Stock Exchange (LSE). Founded in 1974, NMC was listed in London in 2012 and has around 16,500 employees in the UAE.
Problems at NMC Health surfaced last December when investment firm Muddy Waters Capital published a detailed report alleging that NMC had misled investors and failed to disclose: (i) its lack of internal controls; (ii) de facto related party transactions; (iii) true debt burden; (iv) true cash-on-hand and asset values; and (v) use of reverse factoring.
NMC Health’s debt is now estimated to be around $6.6bn, higher than the $5bn revealed earlier this month and substantially higher than the $2.1bn last declared in its accounts, the company said on 24 March as it appointed a new chief restructuring officer to sort out its finances, reported The National. Shares of the company have been suspended from trading.
In a statement to the LSE, NMC said that it was “continuing to work with its advisers to understand the exact nature and quantum of the undisclosed facilities, including the circumstances in which they were obtained.” Some of the money are alleged to have been spent on non-group purposes.
NMC said that it was continuing to focus on its medical operations and the coronavirus epidemic. The group accounts for about 30% of the UAE health industry, reported Arab News. It also does business in other countries, including Saudi Arabia where it launched a joint venture last year with the General Organization for Social Insurance.