(Bloomberg) — NMC Health Plc found $2.7 billion of debt hidden from its board that was used for unknown purposes, tipping the troubled Middle Eastern hospital operator into a full-blown accounting scandal.

The company, which until last month traded in the FTSE 100, is trying to establish the exact “nature and quantum” of the debt facilities, but some of the money may have been used for unauthorized purposes, NMC said late Tuesday. The discovery more than doubles NMC’s borrowings to around $5 billion, up from the $2.1 billion that was disclosed in June.

The revelations deal a hammer blow to the hospital chain, which has been in free fall since December, when short seller Muddy Waters Capital LLC alleged that NMC overpaid for assets, inflated cash balances and understated debt. The debt disclosures heap fuel on concerns that arose when an investigation found the board was unaware of borrowing arrangements involving NMC’s founder and its former vice chairman.

The discovery that Abu Dhabi-based NMC “has at least $2.7 billion in undisclosed debt and no cash, it is not longer just a fraud. It is a massive fraud,” Muddy Waters founder Carson Block said in an emailed statement.

The scandal surrounding NMC also puts a spotlight on corporate governance in the United Arab Emirates as the country tackles the double whammy of managing the coronavirus outbreak and the oil-price war. Its troubles come less than two years after the collapse of Abraaj Group, which snuffed out private equity in the Middle East.

“While the NMC scandal may be overshadowed by other crises at the moment, it will likely encourage greater scrutiny over future transactions and investments taking place in the U.A.E.,” said Robert Mogielnicki, a resident scholar at the Washington D.C.-based Arab Gulf States Institute.

NMC’s $400 million sukuk due November 2023 collapsed after Tuesday’s statement, falling 38 cents on the dollar to less than 25 cents, according to data compiled by Bloomberg.

The largest health-care chain in the U.A.E., NMC had appointed investment bank Moelis & Co. and consultant PwC to help the company in discussions with lenders and bring transparency to its financial position. NMC has also asked its creditors for an informal standstill on its debt as Abu Dhabi considers injecting capital to mollify investors.

In January, the company put former U.S. Federal Bureau of Investigation Director Louis Freeh in charge of a review, which discovered that businesses owned by founder Bavaguthu Raghuram Shetty and former Vice Chairman Khaleefa Bin Butti borrowed money from NMC’s supply-chain lender. NMC guaranteed repayment of those $335 million of borrowings, which the board was also unaware of.

The shares have been suspended in London since Freeh’s findings were revealed Feb. 27, and the U.K.’s Financial Conduct Authority has started a formal enforcement investigation.