NMC Health Plc Class Action Lawsuit

Case Summary

Company Name
NMC Health Plc
Stock Symbol
Class Period
March 13, 2016 to March 10, 2020
Central District of California

On March 10, 2020, the NMC Health Plc securities class action lawsuit was filed charging NMC Health and certain of its current and former officers with violations of the Securities Exchange Act of 1934.  The NMC Health securities class action lawsuit was commenced in the Central District of California on behalf of purchasers of NMC Health publicly traded securities between March 13, 2016 and March 10, 2020 (the “Class Period”) and is captioned Hashem v. NMC Health Plc, et al., No. 20-cv-02303.

NMC Health, together with its subsidiaries, provides healthcare services in the United Arab Emirates, the United Kingdom, Spain, and internationally.

The NMC Health securities class action lawsuit alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose that: (i) NMC Health lacked effective internal controls and risk management; (ii) NMC Health was engaged in undisclosed and extensive related-party transactions; (iii) NMC Health’s debts were significantly understated and its cash-on-hand figures were overstated; (iv) NMC Health’s principal shareholders were not accurately reporting or accounting for their interests or stakes in NMC Health; (v) NMC Health did not review or know what its principal shareholders’ interests or stakes were in NMC Health; and (vi) consequently, NMC Health was not enforcing its Relationship Agreement with its principal shareholders.  As a result of this information being withheld from the market, NMC Health securities traded at artificially inflated prices during the Class Period, with NMC Health’s American Depositary Shares (“ADSs”) trading at prices of more than $50 per share.

On December 17, 2019, Muddy Waters Capital LLC published a report explaining that NMC Health had misled investors and failed to disclose: (i) its lack of internal controls; (ii) (de facto) related-party transactions; (iii) its true debt burden; (iv) its true cash-on-hand and asset values; and (v) its use of reverse factoring.  On this news, the price of NMC Health ADSs fell $11.68 per share, or over 33.6%, to close at $23.00 per share on December 17, 2019.

On January 8, 2020, NMC Health issued a press release entitled “KBBO pricing announcement,” which acknowledged and downplayed a 31.2 million share sell-off by certain of the defendants, which equated to roughly 15% of NMC Health.  On this news, the price of NMC Health ADSs fell $6.48 per share, or over 28%, to close at $16.36 per share on January 8, 2020.  In February 2020, several of NMC Health’s officers and directors resigned from NMC Health, including certain of the defendants, causing the price of NMC Health ADSs to decline further.  Then, on March 10, 2020, the Financial Times published an article, entitled “NMC Health Discovers Almost $3bn of Debt Hidden from Its Board,” which continued to disclose NMC Health’s lack of internal controls and under-reporting of debt.  Further on March 10, 2020, Bloomberg published an article reporting that an insurer was assisting NMC Health in paying its expenses.  On this news, the price of NMC Health ADSs fell $3.28 per share, or almost 64%, to close at $1.85 per share on March 10, 2020.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

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