BR Shetty, the founder of the collapsed UAE-based healthcare provider NMC Health, has initiated a lawsuit against state-owned Bank of Baroda and several of its officials in the Bombay High Court. Shetty is seeking approximately $15 billion in damages, alleging that bank personnel colluded with former NMC executives to siphon funds from his companies.
The lawsuit claims that Bank of Baroda officials facilitated transactions used to divert funds from NMC group entities. Furthermore, Shetty alleges the lender failed to act on multiple money-laundering alerts and that personal guarantees bearing his forged signatures were utilized.
NMC Health's Collapse and Bank of Baroda's Prior Involvement
NMC Health, once a major private healthcare provider in the UAE, collapsed in 2020 following a forensic audit that uncovered billions of dollars in undisclosed debt. This led to insolvency proceedings across various jurisdictions, including the Abu Dhabi Global Market Court and the High Court of Justice of England and Wales.
Bank of Baroda was a significant lender to NMC Health and had substantial exposure to its operations. In July, the bank entered into an out-of-court settlement, paying $600 million (approximately Rs 5,700 crore) to the joint administrators of NMC Health PLC, NMC Healthcare Ltd, and NMC Holding. The bank stated this settlement was to conclude disputes, avoid prolonged litigation, and resolve all claims without admission of liability or wrongdoing.
Renewed Scrutiny on Bank Officials
Despite the previous settlement, Shetty's new complaint against Bank of Baroda brings the actions of the state-owned lender's officials back into the spotlight. The allegations of fraudulent activity, lack of proper care, and the use of forged signatures had been serious charges even in the Abu Dhabi Global Market Court proceedings, where insolvency claims were also made against Shetty, former NMC executive Prashant Manghat, and Bank of Baroda.
The current lawsuit is expected to trigger further investigation into whether bank officials were indeed involved in facilitating fund diversions and if the bank knowingly ignored crucial alerts. This high-stakes legal battle could have significant implications for Bank of Baroda, which has already seen its shares fluctuate amid previous developments related to the NMC Health saga.