UAE NMC hospital founder B.R. Shetty, others under pressure as UK court orders total asset freeze

Dubai: A court in London has put a freeze on any asset disposals by Dr. B.R. Shetty, founder of Abu Dhabi headquartered NMC Healthcare, as well as on other shareholders and former top executives, including Prasanth Manghat, who stepped down as CEO in late February last year.

The latest court order is sweeping in its impact – no assets held anywhere in the world by these individuals can now be sold. In recent months, court orders freezing Shetty’s assets had been issued in Dubai (by DIFC Courts) as well as in India after lenders – to NMC and Shetty individually – brought charges.

The verdict will “amplify the pressure” on Shetty and the others named, according to banking industry sources here. Manghat owns and operates hospitals and clinics in Kerala, including a specialty facility in Palghat.

He is believed to be in India, as are other former executives. They made their departures as soon as the NMC scandal came to light.

The UK court order stems from a request from Abu Dhabi Commercial Bank – the entity with the highest exposure to NMC, at an estimated Dh4 billion. Not just that, the ‘Financial Times’ reported that ADCB in its plaint specifically named Shetty – who founded NMC in the mid-1970s – as being the “chief protagonist” in the whole billion-dollar saga.

Direct charge

If the “chief protagonist” tag was used, it means that ADCB has given short shrift to Shetty’s claims that he was totally unaware of the wrongdoings by the previous management. The billionaire – he’s been in India since early last year – had issued periodic statements to this effect, and in November, tried to make a return to the UAE.

But he was barred from leaving at the Bengaluru Airport by the authorities, given the strictures passed against him by a court in India.

Shetty had also made formal requests with the Indian authorities to investigate his former executives and help clear his name.

NMC implodes… and resets

It was just over 12 months ago that the NMC Health financial crisis started to unspool. It eventually led to the damning detail that billions of dirhams in bank loans/credit were diverted from NMC – the UAE’s largest private healthcare operator - accounts over a period of years. The extent of the exposures – as well as to other creditors – are still being worked on, but some estimates place it in the $4 billion plus range.

Since April, NMC is under administration – also based on an initial court order from London on a motion filed by ADCB. NMC turned in a healthy performance during 2020, both operationally and in the disposal of non-core assets as it sought ways to stabilize its operations and start the long process of paying off creditors. During a media briefing last week, senior NMC management declined to go into the current status of investigations against Shetty and the others.

Putting the squeeze in India

Banking and legal sources will be watching with interest as to the next steps ADCB could take to get its money back. That could mean casting the legal net to Indian shores as well.

“Since Shetty and some of the others are based in India, the courts there could be the next port-of-call,” said a banker. “The UK court order already carries a lot of punch, given the worldwide freeze it has brought in.”