Businessman Shetty seeks to investigate NMC and former Finablr CEOs in India over $ 6 billion scandal
MUMBAI / DUBAI (Reuters) – Indian entrepreneur BR Shetty has filed a complaint with federal investigative agencies in India seeking an investigation into two former senior executives of his companies and two Indian banks linked to a multibillion-dollar financial scandal of dollars that engulfed his group.
Several companies linked to Shetty, including leading UAE hospital operator NMC Health PLC and payment company Finablr PLC FINF.L, suffered serious financial hardship this year after short seller Muddy Waters questioned NMC’s financial data.
At issue, Muddy Waters said, questions about the purchase prices of assets and NMC’s capital expenditures, which she said were both inflated.
NMC and Finablr subsequently announced much higher debts than they had previously announced.
Shetty’s 55-page complaint, a copy of which was seen by Reuters, accuses the former CEOs of NMC and Finablr, as well as their associates and bankers, of inflating company balance sheets, of organizing credit facilities. “illegal” credit and embezzlement since 2012.
He calls on the Indian Federal Police, the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) – India’s financial crime agency – to investigate.
The complaint, with more than 100 pages of supporting documentation, says it was also sent to the Indian prime minister’s office, the central bank and other investigative agencies.
A spokesperson for the two former CEOs, brothers Prasanth and Promoth Manghat, dismissed Shetty’s claims, saying he had significant control over the management of NMC after stepping down as CEO in 2017 and that he or his family had remained on the boards of companies such as Finablr.
“These unfounded allegations against Prasanth Manghat and Promoth Manghat are a clumsy attempt to distract from their skills and their real added value to the success of NMC, Finablr … and Shetty’s own role in what happened. “said the spokesperson. said in an emailed statement.
Bank of Baroda and Federal Bank, the Indian lenders named in Shetty’s complaint, did not respond to Reuters’ request for comment.
CBI, ED and the Prime Minister’s Office did not respond to requests for comment. India’s central bank declined to comment.
The High Court in London put NMC under administration in April after reporting debts of $ 6.6 billion. UK-listed Finablr said in March it was bracing for possible insolvency and warned a month later it could have nearly $ 1 billion more in debt than previously announced. previously.
At a press conference on Wednesday, NMC directors Alvarez & Marsal said their investigative team was working with legal advisers to develop a strategy to recover losses, which could run into billions of dollars, and to obtain compensation for damages suffered by NMC as a result of the alleged fraud.
Finablr CEO Bhairav Trivedi told Reuters last week that the company continues to cooperate with all relevant authorities who investigate potential wrongdoing by former executives, advisers and bankers of the company.
Shetty, now in India and the subject of a criminal complaint himself in Abu Dhabi, is battling court cases in India and Dubai as banks seek to claw back loans from his companies. In April, the UAE’s central bank ordered banks to freeze accounts for Shetty and her family, sources told Reuters.
“We have submitted all the evidence in this complaint, which if anyone examines it will clearly conclude that Dr Shetty is innocent and that all of this happened under his nose – unfortunately behind his back,” said Shetty’s lawyer, Zulfiquar Memon of MZM. Legal told Reuters.
Memon said the complaint was filed after a month-long internal investigation and investigative agencies were reviewing the complaint.
Reporting by Abhirup Roy in Mumbai and Saeed Azhar in Dubai; Additional reporting by Davide Barbuscia; Editing by Nick Tattersall and William Mallard