There is never a good time to go bust, but for a hospitals operator such as NMC Health, the middle of a global pandemic is probably the worst possible time. Admittedly, NMC did not have much say in the matter, having been at the mercy of external forces for much of the past four months. In that brief period, it has gone from being one of the most highly valued and successful businesses in the Middle East to a financial disaster. There can be few faster falls from grace in business history. The company was on the back foot from the moment last December when Muddy Waters, the San Francisco-based activist investor, issued a damning report on NMC, alleging longstanding financial abuse. NMC reacted with blanket denials, but the stock markets believed Muddy Waters and savaged the shares. The appointment of a former director of the FBI, Louis Freeh, was designed to show that NMC was determined to get to the bottom of the allegations, which it still denied. But Freeh obviously took his job very seriously indeed, and the more he looked, the more he found wrong. Debts went from a manageable $2 billion to an unexplained $5 billion, then to a life-threatening $6.6 billion, which is where they stand for the time being. NMC shares, once one of the darlings of the London Stock Exchange, were suspended. Shareholders were removed from the board, and executives were fired or took illness-related leave. Advisers, restructurers and investigators were appointed. A new chairman took charge. The latest development in this corporate debacle came at the weekend when Abu Dhabi Commercial Bank (ADCB) decided to ask a UK judge to put the company into administration. It should be stressed that administration is not the same as bankruptcy liquidation. It is a measure designed to ensure that a company’s operations can continue even in financial difficulty. But it is a measure usually taken in extremis. ADCB is one of around 80 banks to which NMC is massively and — so far — inexplicably indebted, but it is the biggest, with nearly $1 billion owed. That must have been the reason for its decision to go for administration, rather than forming a creditors’ committee with the other banks. The new executive chairman of NMC, UAE entrepreneur Faisal Belhoul, did not agree with ADCB’s move, and made that obvious in a statement announcing his “stabilization strategy” for NMC. This involves the request for a “standstill” agreement on loan repayments, a commitment to transparency and strong governance, and a commitment to “vigorously chase down the perpetrators” responsible for its huge, unexplained liabilities. Belhoul said treating any one individual creditor above the others would jeopardize NMC’s operations and increase the financial risks for the company. He is surely right. In the midst of the pandemic, the hospitals and clinics that NMC runs — which are treating hundreds of suspected COVID-19 patients — have to be the first priority. It would be unforgivable if anything were done to threaten the availability of NMC’s 2,200 beds in the UAE, as well as a big number in Saudi Arabia. As for “chasing down the perpetrators,” that mission is looking increasingly difficult. For one thing, the perpetrators have not been officially identified yet. The forensic accountants and the authorities in the UAE and the UK have not announced the findings of their investigations. There is no word on when Freeh might conclude his own probe. Another complicating issue is the fact that former key executives of NMC, who might be able to shed light on how its debts got so big and where all that cash is now, are no longer in either UAE or UK jurisdiction. It is becoming increasingly clear that NMC is the victim of one of the biggest frauds in the UAE’s history. When the time is right, that must be investigated thoroughly and the fraudsters apprehended, prosecuted and punished. The reputation of the UAE as a place to do business is at stake. But with the pandemic raging, that time is not now. NMC’s operations need to be safeguarded, its dedicated staff retained, and its hospitals kept open and functioning. All creditors should recognize that and forget their differences as long as the COVID-19 emergency lasts. • Frank Kane is an award-winning business journalist based in Dubai. Twitter: @frankkanedubai