Healthcare operator NMC has become the latest corporate to be embroiled in a financial scandal, further undermining the reputation of the UAE’s financial sector.

On 10 March, the London-listed company revised its debt estimate to AED18.3bn ($5bn) after identifying $2.7bn in facilities that may have been used “for non-group purposes”, adding that they had not been disclosed to or approved by its board.

NMC has also announced that Moelis and Pricewaterhouse Coopers have been appointed to assist it negotiate with lenders and restructure its debt.

The disclosures follow the exit of founder and chairman B R Shetty and vice-chairman Khalifa Butti Omair Yousif Ahmed al-Muhairi. NMC has dismissed its CEO Prasanth Manghat late in February, and granted extended sick leave to its chief financial officer Prashanth Shenoy.

NMC’s troubles became public when US hedge fund Muddy Waters alleged in late 2019 that the company’s balance sheet had been manipulated and that it had inflated the value of its acquisitions.

The company may now be sold, with reports of four bidders interested in buying the company.

If the NMC case was an isolated one, the damage to the UAE would be limited. Instead, it follows two other high profile scandals in recent year involving private equity firm Abraaj and construction contractor Drake & Scull International (DSI).

Taken together these cases appear demonstrate a pattern of behaviour that regulators will have to redouble their efforts to counter. In the age of activist investors, if the regulators fail to spot the problem, someone else will.