B.R. Shetty seeks $15 bn from Bank of Baroda, several officials and others over alleged role in NMC fraud

Bavaguthu Raghuram Shetty, founder of NMC Healthcare and UAE Exchange, has approached the Bombay High Court (HC) seeking $15 billion in damages from Bank of Baroda and several of its officials, alleging that they helped facilitate transactions linked to the financial fraud that led to the collapse of his business empire.

Shetty has sought $5 billion in direct damages, $5 billion for consequential losses, including lost business opportunities, and another $5 billion for reputational damage. The first two claims are against all defendants, while the reputational damages claim is against Bank of Baroda alone. He has also sought 18% annual interest on the amounts claimed.

According to the filing seen by Mint, the suit names 26 defendants, including the bank, 10 of its officials, former NMC executives Prasanth Manghat and Promoth Manghat, their associates, and two Indian companies, Avitis Super Speciality Hospitals Pvt. Ltd and SMARD Building Solutions Pvt. Ltd.

Shetty accuses the bank of processing suspicious transactions, ignoring repeated anti-money laundering alerts and allowing transfers based on signatures and instructions he claims were forged or unauthorized. The allegations have not been established in court.

Allegations

The plea says the bank’s systems generated more than 100 alerts on NMC Group accounts, but these did not lead to meaningful investigations, action to stop transactions or reports to authorities. It also alleged that the bank's zonal office queried seven accounts at the request of a correspondent bank, and the branch responded that all were “NMC-related.”

Shetty further alleged that the bank’s Abu Dhabi branch “advised the Manghat team how to structure and paper those transactions so that they would pass scrutiny”. It also accuses the bank of executing “every leg of the roundtripping” of funds from NMC.

In one instance, about AED42 million was allegedly paid to Prasanth Manghat between May 2018 and January 2019 through an account linked to Guide General Contracting and Maintenance. Shetty questions the purpose of these payments and alleges that the bank failed to address compliance concerns.

Shetty says he often signed large numbers of documents presented by people he trusted, sometimes signing between 100 and 200 documents a day. He alleges that some signatures were obtained by misleading him, while others were copied electronically or forged.

Shetty also alleges that two accounts were opened in his name at the National Bank of Fujairah in December 2017 and March 2019 without his knowledge. The documents used to open the accounts allegedly carried forged signatures and authorizations.

According to Shetty, the accounts were later used to move money from group companies to the Manghat brothers, their associates and companies they controlled.

He further alleges that Bank of Baroda accepted instructions on his personal account from people who were not authorized to operate it, even though Joseph Pinto was the only authorized signatory. He claims the bank also honoured cheques bearing forged signatures.

In a separate example, the plea refers to about $1.34 million credited to Shetty’s non-resident ordinary account with HDFC Bank, followed by an instruction to transfer $1 million to UAE Exchange. Shetty says he did not issue or approve the instruction.

Billions in payments under question

Shetty also claims that about AED9.7 billion was paid by Nexgen to NMC accounts between 2012 and 2018, with the money moving through accounts held at Bank of Baroda. It also cites about AED3.2 billion in payments by Neopharma from 2015 onwards.

Shetty says these transactions did not appear consistent with genuine supplier payments and were around 15 times the related-party purchases disclosed in NMC’s accounts reviewed by the bank’s credit team. The plaintiff also claims that Bank of Baroda handled about 69% of payments made by the supposed suppliers to NMC companies across banks.

The suit points to the gifts allegedly given to bank officials by NMC executives. One example is a farewell dinner at which an Apple MacBook was allegedly gifted to a bank officer. The plaint refers to a document titled “Bank of Baroda Staffs_2019”, which includes captions referring to a MacBook, four iPad Pros and five iPhone XS Max devices.

Shetty questions the bank’s position in those proceedings while the bank pursues recoveries from him under personal guarantees he disputes. The settlement does not, by itself, prove the allegations in his suit.

Mint's queries emailed to Bank of Baroda and MZM Legal LLP, the law firm representing Shetty, remained unanswered.

NMC Health, founded by Shetty, was once the UAE’s largest private healthcare provider and an FTSE 100-listed company in London. Its crisis surfaced in December 2019 after short-seller Muddy Waters questioned its financial statements, debt and cash balances.

In 2020, NMC disclosed billions of dollars in previously undisclosed borrowings, with its debt later revised to about $6.6 billion. The London-listed parent entered administration in April 2020, followed by NMC’s UAE operating businesses in September. The fallout triggered investigations and litigation involving lenders, executives and auditors.