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The Financial Reporting Council (FRC) has opened an investigation into ‘Big Four’ accountancy firm EY over its audit of healthcare firm NMC Health.
According to The Financial Times, the UK accounting regulator’s enforcement division has now opened a probe into the 2018 audit of NMC Health’s financial statements.
It comes after the firm entered administration in April after uncovering debts of $6.6bn (£5.3bn).
NMC said it had “found evidence of suspected fraud” in its investigations by US activist investors Muddy Waters, which also raised questions about the relationship between the healthcare brand and EY.
NMC’s founder Bavaguthu Raghuram Shetty alleged that a small group of current and former executives were responsible for the alleged fraud.
In a statement, EY said: “We can confirm that EY has been notified of the FRC’s intention to conduct an investigation into the audit of NMC Health plc for the year ended 31 December 2018.
“We will be fully cooperating with the FRC during their enquiries. It would be inappropriate to comment further at this time.”
