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NMC Healthcare founder faces $4bn lawsuit

BR Shetty NMC Healthcare Creative Commons/Wikimedia
BR Shetty founded NMC Healthcare, which became the UAE's biggest privately-owned healthcare operator
  • Firm went into administration after $4bn of hidden debt was disclosed
  • Administrators had also filed a UK claim for $2.5bn against EY
  • Multi-billionare Shetty also has law suits seeking $8bn in damages

Administrators have filed a $4 billion lawsuit against the founder of NMC Healthcare BR Shetty and its former chief executive, related to allegations of fraud which led to its demise in 2020.

Legal claims have been made in the UK and Abu Dhabi centred around Shetty, Prasanth Manghat and the Bank of Baroda, as reported by The National.

It quoted Richard Fleming, managing director of Alvarez & Marsal Europe and joint administrator of NMC and NMC Healthcare.

NMC Health was founded by Shetty in 1974 as the New Medical Centre in Abu Dhabi. It became the UAE’s biggest privately-owned healthcare operator.

It boasted a vast number of clinics and hospitals, as well as specialised maternity and fertility clinics and long-term care homes in 19 countries.

The company, which used to be listed in London, ran into trouble in 2020. It went into administration after it disclosed more than $4 billion in hidden debt.

NMC’s issues began in late 2019 when short-seller Muddy Waters questioned its finances, leading to a sharp fall in its share price.

Reuters reported in March last year that the core operations of NMC had exited administration to form a new company.

The UK-registered NMC Healthcare Plc and UAE-registered NMC Healthcare Ltd still remain in administration, the report added, citing information from NMC.

The following month, Alvarez & Marsel filed a $2.5 billion lawsuit against the UK arm of EY for “audit negligence” between 2012 and 2018.

Shetty’s wealth was estimated by Forbes to be around $4 billion in 2019. He was once famous for his ‘100, Burj Khalifa, Dubai’ address and lavish Bollywood star-studded parties.

He continues to deny any wrongdoing and maintains that he has been the victim of fraud.

The Indian entrepreneur has sued former top executives of his companies, banks and auditor EY, claiming that they were responsible for the alleged complex multi-billion-dollar fraud. He is seeking $8 billion in damages.