NMC founder BR Shetty returning to UAE

By Rahul Vaimal, Associate Editor
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Dr. BR Shetty
Dr. BR Shetty, founder of NMC Healthcare and UAE Exchange Centre

Dr. BR Shetty, the founder of NMC Healthcare and UAE Exchange Centre, has confirmed his return to the UAE. He has denied the reports that he had left the country after the collapse of the hospital group due to the previously undisclosed debt.

NMC Health went into administration in April following months of uncertainty over its finances and the revelation that it has $6.6 billion in debt, well above earlier estimates.

Earlier this month, Alvarez & Marsal administrators took initial measures towards legal action against the auditor of NMC, Ernst & Young, as it seeks to increase recoveries for creditors.

Dr. Shetty said in a statement that, “I traveled to India in February to be with my ailing brother who sadly passed away at the end of March, just as the pandemic spread across the world disrupting international travel.”

And he added that the reports that claim he fled “could not be further from the truth.”

“I said at the time that I intended to return to the UAE and – has filed a criminal complaint against the suspected perpetrators of the fraud in India – I am planning my imminent return to the UAE as promised. I intend to support the UAE authorities and all relevant bodies to correct any injustice done to the companies, their employees, shareholders and other stakeholders and help find solutions to outstanding matters,” added Dr. Shetty

Blaming previous administrates 

Throughout these months, Shetty had no idea how billions of dollars were missing. He conducted a private investigation into the affairs of the company. The results point out to the senior officials of the previous administration as the culprit, including then CEO Prasanth Manghat and his brother Promoth Manghat (who was the CEO of Finablr, the UAE Exchange Centre’s parent company).

Both NMC and UAE Exchange were listed on the London Stock Exchange respectively in 2012 and 2019.

On investigation

In the meantime, the administrators assigned to manage NMC have systematically gathered information related to bribery and how a group of executives bilk billions of company funds.

As per the evidence collected to date;

  • The released financial statements were misinterpreted, dating back to at least 31 December 2012
  • Money and property were misused from NMC
  • The perpetrators tried to make NMC liable for the debt that never received a benefit or adequate benefit
  • NMC’s losses could be in the billions of dollars.

In a recent update that gave to bankers and other creditors, the administrators from the specialist consultancy Alvarez & Marsal said, “We have set target dates for all the relevant steps to complete the formulation of strategy and preparation of claims arising from the investigation to seek redress from those parties connected to the fraud.”

According to bankers, it is now believed that some of the former management is ‘helping’ with the inquiry. However, it has not confirmed officially.

No questions of elope

Shetty made the point in the statement that his intention was always to return to the UAE and clear up the problems in which he finds himself.

Dr. Shetty stated, “The fraud has regrettably caused huge challenges for the companies, great hardship for employees, disruption to supplies and losses to shareholders and creditors. I would like to thank the UAE Government, creditors, administrators and employees for keeping the operations of the company alive during the pandemic”.

“I have complete faith in the justice system of the UAE and look forward to the perpetrators of the fraud facing justice,” he further added.