EY UK has paid more than £100 million ($133 million) to the administrators of NMC Health Plc to settle claims it was negligent in its audits of the failed firm, according to people familiar with the matter.
NMC sued EY for more than £2 billion in the UK courts over the alleged negligence, but the two sides settled the case on confidential terms without admission of liability by EY, according to NMC's latest administration report filed at UK Companies House.
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The filing shows settlement of legal claims of £105.5 million, which people familiar with the matter said was the amount of EY's settlement.
An EY spokesperson said the firm was no longer in a dispute with NMC but declined to comment further. A spokesperson for the administrators Alvarez & Marsal confirmed the claim against EY had settled, but said its terms are confidential.
NMC collapsed in 2020 after a short seller's report revealed the scale of the company's troubles. The UK's markets watchdog criticized the collapsed Middle Eastern hospital operator in 2023 for misleading investors about its debt position by as much as $4 billion.
Lawyers for the formerly FTSE 100-listed firm claimed that EY failed to spot billions in debt at NMC when it audited the company between 2012 and 2018. EY in turn said its auditors had been duped by a sophisticated fraud.
The administrators have ongoing legal claims in the UK against NMC's founder Bavaguthu Raghuram Shetty, its former Chief Executive Officer Prasanth Manghat and India's Bank of Baroda over the collapse of the business. A “consensual stay” on those claims has been agreed pending the outcome of separate litigation taking place in Abu Dhabi, according to the administrators' report, which is dated May 8.
Unsecured creditors of the failed firm are set to get a payout, but the report said it could not be accurately estimated at this stage. Shareholders in the company aren't expected to receive anything from the administration process.
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The administrators said that £47.9 million had been repaid to litigation funders, along with an agreed litigation return of £22.2 million.
Alvarez & Marsal estimated its fee for the entire process would be £69.2 million following the resolution of the claim against EY.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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