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3mo ago

EY Faces £2.7bn Negligence Trial Over NMC Health Collapse

High Court proceedings begin as administrators accuse EY of audit failings, while the firm denies liability, citing collusive fraud by NMC management.

NMC was founded by Bavaguthu Raghuram Shetty, an Indian-born businessman, in the 1970s and became the largest private healthcare provider in the United Arab Emirates
NMC was based in the United Arab Emirates and operated in 19 countries, including Britain

Overview

  • The High Court trial began in May 2025, with Alvarez & Marsal pursuing a £2.7bn negligence claim against EY for its audits of NMC Health from 2012 to 2018.
  • The Financial Reporting Council’s draft report highlighted serious deficiencies in EY’s audits, including failure to access full records or verify external bank confirmations.
  • EY denies negligence, attributing NMC’s collapse to a complex fraud by its management and asserting its audits adhered to professional standards.
  • NMC Health collapsed in April 2020 after short-seller Muddy Waters exposed $6.6bn in hidden debt, leading to over £3.4bn in creditor claims.
  • The trial, expected to run until October 2025, will hear evidence from both sides, with creditor recoveries hinging on the case's outcome.