The assets of BR Shetty, the founder of the troubled healthcare operator NMC Health, were frozen by a UK court. The freeze order reportedly applies worldwide, and was won by the Abu Dhabi Commercial Bank as its exposure to the company is more than $1 billion. Apart from Shetty, assets of NMC Health’s principal owners and other company executives have also been frozen.
According to the Financial Times, other people whose assets have been frozen are former CEO Prasanth Manghat, Emirati investors Khalifa al-Muhairi and Saeed al-Qebaisi, and two other executives from the company.
On April 15, 2020, the Abu Dhabi Commercial Bank filed a criminal complaint against Shetty, Prasanth Manghat and others over allegations of serious fraud, and wanted the accounts of all the accused to be seized.
As per the current sweeping order, the people named reportedly cannot sell their assets anywhere in the world.
NMC Health, founded in the 1970s, was the largest private healthcare provider in the United Arab Emirates (UAE) and collapsed after allegations of accounting frauds. The company was placed into administration last year in the UK amid those fraud claims. The company was accused of understating its debt by $4.5 billion NMC Health used to be listed in London.
The report said the bank had alleged that Shetty was the “chief protagonist” of the fraud, which the judge reportedly agreed with.
The judgement cited a statement issued by current CEO Michael Davis that the alleged fraud was perpetrated by former executives. “Something had gone very wrong with the management and oversight” of the company, the UK judge said.
The court’s judgement reportedly also had new details about the alleged fraud — including two sets of inconsistent financial accounts being maintained. NMC employees had purpotedly uploaded a series of documents about NMC Health’s account balances for review, but ended up uploading two versions of the same document — the original as well as the fabricated version.
Prior to the UK court, court orders were also issued in India and in Dubai freezing assets in the countries after lenders brought charges against NMC as well as Shetty.
In a statement in April 2020, BR Shetty had claimed that a probe conducted by his own advisors had found alleged fraud at NMC, as well as his payment services group Finablr. He admitted serious frauds in the company, but put the blame on a 'small group of executives', and said he had nothing to do with it.
In November 2020, BR Shetty, who was in India since February that year, was stopped at the Bengaluru airport when he attempted to fly to the UAE.
A consortium of Indian banks, including Bank of Baroda with $250 million in outstanding loans due from Shetty, had initiated travel restrictions on the NMC founder in an attempt to recover the debts. Several other Indian banks, including Federal Bank, have considerable exposure to Shetty-run firms.