Auditing giant EY is being sued for approximately £2bn ($2.7bn) by the main shareholders of United Arab Emirates (UAE) hospital operator NMC Health, Reuters reported.
The 12-week trial at the High Court in London on 19 May 2025, centres on allegations that EY’s audits from 2012 to 2018 were negligent, failing to uncover significant unreported borrowing by NMC’s main shareholders.
NMC Health, was listed in London in 2012 and promoted to the FTSE 100 in 2017, collapsed in 2020 after revealing more than $4bn in hidden debt.
Administrators Alvarez & Marsal, appointed after NMC’s collapse, argue that EY, formerly Ernst & Young, provided unqualified audit opinions during the period, despite missing billions in undisclosed debt and guarantees.
Simon Salzedo, the lawyer representing NMC’s administrators, described EY’s audits as “among the most fundamentally flawed examples of big-firm auditing” seen in a UK courtroom.
He acknowledged that a single incorrect audit opinion does not necessarily constitute negligence but argued that issuing seven consecutive flawed opinions was difficult to justify.
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By GlobalDataEY, however, denied the allegations of negligence.
The firm’s lawyers contend that EY was a victim of a “pervasive and collusive fraud” orchestrated by NMC’s senior personnel, including its principal shareholders, who manipulated the company’s accounts to conceal the fraud from auditors.
They argued that NMC’s case relies on expecting auditors to achieve the “impossible” in detecting such deception.
The lawsuit follows other recent criticisms of EY’s auditing practices, including its work for collapsed travel firm Thomas Cook and German payments company Wirecard.
The administrators are seeking damages of around £2bn plus interest, down from an earlier claim of up to £2.7bn, primarily linked to undisclosed financial guarantees.
Separately, NMC has initiated legal action against its founder, BR Shetty, who denies any wrongdoing, as well as other parties in London, the UAE, and the US.
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