NMC Health faces legal action from IVF clinics founders

NMC Health is facing another legal battle in the courts as the founders of an IVF business, which was sold to the company, say it failed to honour an agreement with them. Dr Michael Fakih, his wife and co-founder Dr Amal Al-Shunnar and their company Pine Investments are seeking the restitution of a 49 per cent stake sold to NMC Health in 2018, according to a document filed in the Dubai International Financial Centre Courts. The claimants “were induced to enter into that agreement" by false claims made by NMC Health’s former chief executive, Prasanth Manghat, the document states. Fakih IVF was founded by Dr Fakih and Dr Al-Shunnar in 2011. They agreed to sell a 51 per cent majority share to NMC Health in 2015, and the remaining 49 per cent stake for Dh753 million in 2018, valuing it at Dh1.5 billion. During the second stake sale, they agreed to take a bigger portion of the consideration in shares than in cash, which they claim they only agreed to after NMC Health's former chief executive Mr Manghat guaranteed the company would make good any shortfall if NMC’s share price dropped below £29.20, according to the claim. It states that Mr Manghat’s representations to them during the negotiations were false as he never informed NMC Health’s board of directors about the guarantee or sought their permission to offer it. Pine Investments sold a small amount of shares at a price below the guarantee and wrote to the company in February seeking the Dh25.4m difference between the lower sale price and the guarantee. It also requested to offload its remaining NMC shares at the guaranteed price, but did not receive a reply, according to the claim. Mr Manghat was dismissed from NMC Health on February 26 and the company was placed into administration in April . A spokesman for Mr Manghat declined to comment when contacted by The National . Pine Investments states in its claim that NMC Health is liable as Mr Manghat was acting as chief executive when signing the agreement. It wants to unwind the 2018 deal, or requisite damages. It has brought the claim against UK-based parent company NMC Health plc, which is currently in administration, and its UAE operation NMC Healthcare LLC, which is not. NMC Health and administrators Alvarez & Marsal declined to comment, but confirmed they intend to defend the claim. A document filed in the courts states that NMC Health intends to contest jurisdiction. Mr Fakih and Pine Investments did not respond to requests for comment. NMC Health is facing a number of other claims, including one from lender Credit Europe Bank in the DIFC Courts, which claims NMC Health and its NMC Trading division are "jointly and severally liable" for a loan of more than $8m (Dh29.4m), which is in default. The companies have indicated they will defend the claims. NMC Health's founder BR Shetty is also named as a defendant by the lender. In his defence, he states that security cheques bearing his signature had been forged. The company is also facing class action suits in the US from lawyers looking to represent holders of NMC shares through instruments known as American Depository Receipts. NMC Health is the largest private healthcare company in the UAE. Earlier this month, administrators Alvarez & Marsal set out a three-year turnaround plan for the business which involves placing its UAE arm into administration through the Abu Dhabi Global Markets Courts and raising an additional $300m from existing lenders. It plans to focus on its UAE and Oman operations and sell off non-core businesses elsewhere. "We are dealing with them on a one-by-one basis, defending those, but clearly our key priority is to move into ADGM [Courts]," Alvarez & Marsal managing director Maria Simovic told The National in reference to claims being faced by the company. Placing the UAE business into administration would provide it with protection from further creditor claims.

NMC Health faces legal action from IVF clinics founders

Michael Fakih's Pine Investments is seeking the restitution of a 49% stake sold to the company for Dh753m two years ago