REFILE-Collapsed hospital operator NMC withdraws 2 billion pound UK lawsuit against EY

LONDON, Jan 31 (Reuters) - Collapsed former hospital operator NMC Health this week withdrew its London lawsuit seeking nearly 2 billion pounds ($2.7 billion) plus interest from auditor EY for allegedly negligent audits, according to a court order.

The administrators of NMC – a FTSE 100 company when it collapsed in 2020 after disclosing more than $4 billion in hidden debt – sued over audits from 2012 to 2018, when EY gave an unqualified opinion that NMC's accounts were accurate.

NMC was seeking 1.94 billion pounds, largely relating to undisclosed guarantees, plus interest. The trial of its lawsuit began at London's High Court in May and concluded in October.

But before the court could rule on the case, NMC withdrew its claim, according to a court order dated January 29. The order states "there shall be no order as to the damages claimed or as to the costs of the claim", with no further details.

Lawyers representing NMC's administrators and EY did not immediately respond to requests for comment.

The company's administrators Alvarez & Marsal had accused EY, one of the world's "Big Four" auditors and formerly known as Ernst & Young, of negligently failing to spot a major fraud by NMC's main shareholders.

But EY argued at last year's trial that it was NMC's own senior personnel who perpetrated the fraud and manipulated its accounts, hiding the fraud from EY.

NMC Health PLC listed in London in 2012 and joined the FTSE 100 in 2017, before short-seller Muddy Waters questioned its financials in December 2019 sending NMC's shares tumbling by almost a third in a day.

($1 = 0.7306 pounds)