Global accountancy firm EY is facing a £2 billion lawsuit in the UK High Court over its alleged failure to detect what administrators call a massive fraud at NMC Health, a once-prominent hospital operator. The suit alleges EY turned a blind eye to glaring signs of corporate misconduct, allowing NMC’s top shareholders to siphon billions before its dramatic 2020 collapse.
A Healthcare Empire Built on Sand
Founded in 1974 by Indian entrepreneur B.R. Shetty, NMC Health grew from a single clinic into the UAE’s largest private healthcare provider. By 2012, it was listed on the London Stock Exchange, later joining the FTSE 100. At its peak, the firm operated 45 hospitals and 15 pharmacies across the UAE, UK, Sweden, and Latvia.
But behind the veneer of corporate success was what administrators now describe as a carefully orchestrated financial fraud—one that went undetected for years by one of the world’s most prestigious audit firms: Ernst & Young (EY).
NMC Health was forced into administration in 2020 after revelations that its balance sheet concealed billions in hidden debt and manipulated transactions. Three key shareholders Dr. B.R. Shetty, Khalifa bin Butti, and Saeed bin Butti are alleged to have extracted vast sums from the business, triggering its downfall. All three have denied any wrongdoing.
A report by U.S. short seller in December 2019 first alerted the market to financial irregularities at NMC, causing its share price to plummet by 32% and catalyzing a full-blown corporate unraveling.
“Never Even Opened the Books”: Auditors Under Fire
Court documents filed by administrators Alvarez & Marsal paint a picture of chronic audit negligence. EY, which audited NMC Health from 2012 to 2018, is accused of failing to obtain meaningful access to the company’s records.
According to the lawsuit, EY’s audit team relied on surface-level glimpses of NMC’s finances—at times viewing data “over the shoulder of an NMC employee”—rather than gaining full access to general ledgers or transaction-level records. The auditors are alleged to have missed thousands of manipulated journal entries that pointed to fraudulent borrowing and financial misstatements.
“If EY … had obtained proper access to [NMC’s] general ledgers, the fraud would have quickly become apparent,” the administrators claim.
The suit goes further, alleging that EY helped cover its tracks by misleading its own internal investigators. “They pulled the wool over the eyes of their reviewers,” the filings argue, calling the failings “extremely serious.”
In defense, EY has denied all allegations and claimed it is itself a victim of deception, stating that “everyone to whom EY might realistically have turned for information… was engaged in practising the wholesale deception of EY.”
Legal Battle Raises Bigger Questions on Auditor Accountability
The £2 billion lawsuit is one of the largest negligence claims ever brought against an audit firm in the UK, and raises new concerns about the role of auditors in detecting large-scale frauds—particularly in high-growth, opaque international firms.
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EY has pushed back strongly, accusing the administrators of “shying away” from suing the actual perpetrators—namely, the bin Butti brothers and other former executives. It has also framed itself as the “principal target and victim” of the deception.
The legal proceedings arrive at a moment when public trust in audit firms is under renewed scrutiny, especially given a string of high-profile failures including Carillion, Wirecard, and Patisserie Valerie.
For Dr. Shetty, once a poster child of Gulf entrepreneurship, the saga has been equally disastrous. Though he maintains he was a victim, not an architect, of the fraud, the UK High Court froze his assets in 2022—including a luxury penthouse in London.