Shares of state-run Bank of Baroda (BOB) saw a decline in Wednesday's trading session, reacting to news of a massive $15 billion lawsuit reportedly filed against the bank by BR Shetty, founder of NMC Healthcare and UAE Exchange.
According to reports, Shetty accuses Bank of Baroda of colluding with former executives of his business group to siphon off funds. He claims this alleged fraud left him facing significant liabilities on guarantees he insists he never signed. The suit, filed in the Bombay High Court, reportedly seeks $5 billion in direct damages for fraud and negligence, an additional $5 billion in consequential damages, and another $5 billion for reputational harm. It also demands 18 per cent interest on the initial $10 billion and names BOB, several current and former officers, former NMC executives, and other entities.
Bank of Baroda's Official Stance
In response to stock exchange inquiries, Bank of Baroda clarified that it has not yet been officially served with any lawsuit. The bank stated that it cannot comment on the contents of pleadings that are untested in court. "If and when the bank is served, the bank will defend the suit firmly and take all steps necessary to protect its interests," BOB informed the stock exchanges.
Background to the Allegations
The reported lawsuit appears to be linked to a case in the UAE where Bank of Baroda settled with administrators of the insolvent NMC and its affiliates in July, paying approximately $600 million (around Rs 5,700 crore). Administrators of the UAE-based healthcare group had previously accused BOB of facilitating improper transactions in collaboration with Shetty, alleging a lack of due diligence and failure to follow proper anti-money-laundering and customer verification processes.
The current unconfirmed lawsuit from BR Shetty adds another complex layer to the ongoing legal challenges surrounding the collapse of NMC Healthcare and related entities.