Shares in NMC Health have continued to plunge after some of its biggest shareholders sold a £375 million stake at below-market prices, sending the company’s stock down by 19%.

The deal, led and confirmed by NMC’s second- and third-largest shareholders, Saeed Al Qebaisi and Khaleefa Al Muhairi yesterday, was priced at 1,200 pence per share.

The drop in stock value follows a short-selling attack by US firm Muddy Waters, which, in December, questioned the value of MNC’s assets and cash balance while announcing its short position. This in turn sent HMC’s share price down by more than half since the start of that month.

One aspect of NMC’s dealings, which Muddy Waters is looking to investigate, questions its purported cost for constructing NMC Royal Women’s Hospital in Abu Dhabi.

Muddy Waters claims this “was likely inflated, and that it used an (undisclosed) de facto related party for the construction.”

It added: “Our cost analysis was based on dividing the costs as disclosed by NMC by the square meters of the hospital building. We compared it on a like-for-like basis with other hospitals, including their land costs in the numerators and only the hospital building areas in the denominators. NMC misleadingly adjusted both the numerator and denominator to try to appear that the hospital was not such an outlier.” 

Muddy Waters further questioned NMC’s asset values, cash balance, reported profits, and reported debt levels. It said: “At the worst of times, the company has invested in large assets at costs that we find too high to be plausible – including from parties we believe are de facto under common control. This behaviour gives rise to concerns about fraudulent asset values and theft of company assets.” 

NMC, a FTSE 100 company, has promised a full review of its dealings. The company is beneficially owned by Saeed bin Butti and Khalifa Bin Butti and operates in the Middle East.