NMC Health fraud: BoB says it will defend its interests against BR Shetty’s $15-billion suit

MUMBAI: A day after Dr Bavaguthu Raghuram Shetty, the founder of NMC Healthcare Dubai, and the UAE Exchange, moved the Bombay High Court seeking $15 billion in damages from Bank of Baroda and 25 others against a fraud happened in the his group in 2019 that led to the collapse of his business, the public sector lender has said it has “not been served with any such notices and that when done it will defend its interests firmly and will take all steps necessary to protect its interests”.

Shetty is seeking $5 billion in direct damages, $5 billion for consequential losses, including lost business opportunities, and another $5 billion for reputational damage. While the first two claims are against all the 26 defendants, the reputational damages claim is against the bank alone. He has also sought 18% annual interest on the amounts claimed.

The suit, filed by MZM Legal on behalf of Shetty, 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 and Smard Building Solutions.

Shetty’s suit alleges that the bank and former NMC executives enabled fund diversions, concealed liabilities and subsequently pursued him on guarantees bearing forged signatures.

In an exchange filing Wednesday, Bank of Baroda said it too has seen media reports of a suit said to have been filed by Shetty in the Bombay High Court on October 13. But it has not been served with the suit and therefore could not comment on the contents of the pleadings, which had not been tested in the court, and that “when it was served to them, they would defend the suit firmly and take all necessary steps to protect their interests.”

“The matters described in the media reports are also the subject of proceedings before the Abu Dhabi Global Market Court, where judgment is reserved against Shetty and Prashant Manghat for fraud, wrongful trading, and fraudulent trading.

“Those matters are sub-judice, and the bank cannot comment on the nature of allegations against Shetty. The Abu Dhabi Global Market proceedings have been discontinued against the bank pursuant to a settlement with the joint administrators of NMC Group,” the bank said.

Stating that the bank itself is pursuing recovery and enforcement proceedings in India and the UAE against Shetty for outstanding dues of around Rs 2,800 crore and had obtained several decrees against him, the filing said, “the Karnataka High Court has also restrained Shetty from dealing with or alienating any of his assets in 2021. In subsequent proceedings before the NCLT, Shetty has asserted that he is insolvent and unable to meet the bank’s dues”.

Shetty had previously filed a suit against the BoB in the Supreme Court of New York, making allegations similar to those now reported in relation to the suit in the Bombay High Court. That suit was dismissed in July 2024, the bank said further.

The bank continues to resolutely pursue its legal strategy under advice from reputed senior counsel and law firms and is taking all steps necessary to protect its interests, the bank said.

Development led to a drop in its shares. While the stock closed 2.6% on Tuesday and it lost another 3% on Wednesday.

NMC Health was once the UAE’s largest private healthcare provider and an FTSE 100 stock. 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, much above $2.1-billion earlier estimated.

The London-listed parent entered administration in April 2020, followed by NMC’s UAE businesses in September. The fallout triggered multiple investigations and litigation involving lenders, executives and auditors.

Shetty’s new suit also refers to BoB’s settlement with the joint administrators of NMC Healthcare in June 2026 for around $600 million. The settlement was disclosed on July 2, 2026, without an admission of liability, according to the plaint. But Shetty argues that the settlement relates to the same underlying transactions and questions the bank’s subsequent pursuit of claims against him.

The petition alleges that these aforementioned individuals helped facilitate transactions linked to the financial fraud that led to the collapse of his business empire. The plea also 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.

The plea further says the BoB’s systems generated over 100 alerts on the NMC Group accounts, but these did not lead to meaningful investigations, action to stop transactions or reports to authorities. It also alleges 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 alleges 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 round-tripping” of funds from NMC.

In one instance, about 42 million dirhams were allegedly paid to Manghat between May 2018 and January 2019 through an account linked to an entity named Guide General Contracting and Maintenance. Shetty questioned the purpose of these payments and alleges that the bank failed to address compliance concerns.

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. And that he used to sign many documents daily without knowing some of them were forged and that 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 accepted instructions on his personal account from people who were not authorized to operate it, even though one 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 NRO 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.

Shetty also claims that about 9.7 billion dirhams were paid by Nexgen to NMC accounts between 2012 and 2018, with the money moving through accounts held with BoB. It also cites about 3.2 billion dirhams 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 accounts reviewed by the bank’s credit team. He also claims that the bank handled about 69% of payments made by the 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 staff 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. Settlement by itself does not prove the allegations.

Shetty also claims that he had relinquished control of the group companies before several of the disputed credit facilities were granted. It further alleges that unauthorised staff operated his personal bank account and that forged documents were used to implicate him in the transactions.

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