Britain’s accountancy watchdog has opened an investigation into EY’s audit of the scandal-ridden private hospital operator NMC Health, which collapsed into administration last month. The Financial Reporting Council said on Monday it began its investigation into the audit of NMC’s 2018 accounts in mid-April. The Abu Dhabi-based company runs private hospitals in the Middle East and also owns the Aspen Healthcare chain in the UK. It called in administrators on 9 April after a board-commissioned investigation uncovered $2.7bn more debt than the board was aware of. The hospitals and medical centres are not included in the administration and continue to operate. EY, which is one of the big four auditing firms, said it would be “fully cooperating with the FRC during their inquiries”. The FRC investigation is piling further pressure on EY, which is also being investigated by the watchdog for an audit of Thomas Cook’s accounts before the travel firm collapsed. The FRC aims to complete its investigations within two years. If it finds evidence of wrongdoing, it will transfer the case to a tribunal, which could decide on any penalties including fines, reprimands or ordering EY to review its procedures. The main City regulator, the Financial Conduct Authority, launched an investigation into NMC in late February, after shares were suspended from trading following the deepening accounting scandal at the hospital operator. Last week, Bavaguthu Raghuram Shetty, the Indian billionaire who founded the former FTSE 100-listed firm and resigned as co-chair earlier this year, blamed a small number of current and former executives for the alleged fraud. The turmoil at NMC began in December, when the short-selling hedge fund Muddy Waters flagged concerns over asset values, cash balance, reported profits, and reported debt levels, as well as possible fraud and theft. NMC denied those allegations. It is the largest private healthcare provider in the United Arab Emirates.