NMC Healthcare Founder B R Shetty Seeks $15 Billion from Bank of Baroda

B R Shetty, the founder of NMC Healthcare, has initiated legal action in the Bombay High Court demanding $15 billion in damages from the state-owned Bank of Baroda (BoB) and 25 other defendants. The lawsuit accuses BoB and former executives of NMC Healthcare of facilitating the misappropriation of funds, hiding liabilities, and pursuing Shetty on guarantees that allegedly bear forged signatures.

Shetty is seeking $5 billion in direct damages and another $5 billion in consequential damages jointly and severally from the defendants. Additionally, he demands $5 billion from BoB for damage to his reputation and loss of goodwill. The suit also requests an 18 percent annual interest on the claimed amounts.

The list of defendants includes BoB along with 10 of its officers, former executives from NMC and UAE Exchange/Finablr such as Prasanth and Promoth Manghat, their spouses, and other associates. Two Indian companies, Avitis Super Speciality Hospitals and SMARD Building Solutions, are named as well, as Shetty alleges these entities hold assets purchased with misappropriated funds.

Attempts to obtain a comment from Bank of Baroda regarding the lawsuit were unsuccessful as the bank did not respond before publication.

According to the court filing, Shetty gave up operational control of the group’s companies in 2012 and stepped down as CEO in March 2017. However, he claims he only became aware in early 2020 that he was still listed as NMC’s chairman, after which he resigned. The lawsuit asserts that former executives used forged instructions and signatures to move money through personal and corporate accounts, creating the false impression that Shetty was involved in these financial transactions.

The suit further alleges that BoB repeatedly ignored anti-money laundering alerts and extended credit without sufficient collateral. It accuses the bank of facilitating suspicious transactions through supplier accounts allegedly used for round-tripping, while concealing lending exposures from auditors. Some bank officials are also accused of accepting gifts and failing to act despite internal warnings. These allegations have yet to be proven in court.

A significant point raised in the suit concerns balance confirmations prepared for auditor Ernst & Young (EY). Shetty claims 15 confirmations were drafted but only 11 were submitted to the auditor, implying potential concealment of liabilities.

Shetty challenges BoB’s enforcement of guarantees attributed to him, maintaining that the signatures on these documents were forged. He accuses the bank of continuing to rely on these guarantees even after allegedly being aware that liabilities were being hidden.

In July, Bank of Baroda agreed to pay $600 million (around ₹5,700 crore) to settle litigation connected to the collapse of NMC Health. This settlement marked an end to years of complex cross-border legal battles related to one of the biggest corporate failures in West Asia. Under this agreement, NMC Health, NMC Healthcare, NMC Holding, and their joint administrators resolved all claims against BoB without the bank admitting any liability or wrongdoing.

The litigation originated from the downfall of NMC Health, once the largest private healthcare provider in the Gulf region. The company went into administration in 2020 after billions of dollars of previously undisclosed debt were uncovered. Following the collapse, joint administrators began legal proceedings in Abu Dhabi and England against B R Shetty, former CEO Prasanth Manghat, and Bank of Baroda. These proceedings invoked ADGM and UK insolvency laws, as well as UAE civil law.

NMC Healthcare’s collapse sent shockwaves through the healthcare and financial sectors, highlighting challenges related to corporate governance and transparency in multinational enterprises. The ongoing legal disputes illustrate the complexities involved when corporate fraud and insolvency issues cross multiple jurisdictions.