Dubai's DIFC Court orders NMC founder BR Shetty to pay $46 million to Indian bank

Dubai: A Dubai International Financial Centre (DIFC) court has ordered BR Shetty, founder of the collapsed NMC Healthcare empire, to pay $46 million to State Bank of India after finding he repeatedly lied under oath about signing a personal guarantee for a $50 million loan.

Justice Andrew Moran delivered the judgment on October 8, describing Shetty’s testimony as "an incredible parade of lies" and finding his evidence "incoherent and nonsensical" during the September 29 trial.

The case centered on whether Shetty signed a personal guarantee in December 2018 for a $50 million loan given to NMC Healthcare. Shetty claimed throughout the proceedings that the signature was forged and that he had never met the bank’s CEO, who witnessed the signing.

"I am bound to find that there is overwhelming witness and documentary evidence before me, which satisfies me that Mr Shetty has come before this Court and lied on oath in his multiple denials that he signed the Personal Guarantee," Justice Moran wrote in his 70-paragraph judgment.

The judgment awards SBI – a state-run Indian bank - $45,997,554.59, including interest to the judgment date, with additional interest accruing at 9 per cent annum until payment.

What transpired in this case

The court heard that Shetty initially denied knowing about the loan facility entirely but was forced to admit awareness when confronted with his own email from May 2020.

In that email, sent from his personal account, Shetty acknowledged ongoing discussions with the bank about his guarantee and asked for time to review documents, the judgement document revealed.

"It turns out and I so find, that he was fully aware of and had admitted he had signed the Personal Guarantee back in May 2020," the judge wrote.

The bank’s CEO, Anantha Shenoy, testified that he travelled to NMC's Abu Dhabi offices on December 25, 2018, specifically to witness Shetty sign the guarantee. He provided photographs and a detailed meeting report from January 13, 2019, showing Shetty thanking the bank’s chairman for the $50 million loan.

Shetty attempted to explain away the photographs, suggesting bank officials "must have come and stood there" when he was taking pictures with the chairman. He claimed the meeting was merely for networking purposes.

The judge rejected these explanations entirely. "I found Mr Shetty's attempts to bolster his evidence that he did not sign the documents by stating he had never met Mr Shenoy to be false and discreditable manoeuvring, designed to evade his liability under the guarantee," the DIFC court verdict read.

Shetty made ‘bizarre’ claims

In particularly bizarre testimony, Shetty claimed NMC employees held competitions to copy his signature, with a prize for the winner. When asked what the prize was, he responded that it was "the suffering he is being caused now."

The court also heard expert handwriting evidence. The bank's expert found "very strong evidence" that Shetty wrote the questioned signatures, identifying eleven significant similarities with his known signatures. Shetty's own expert concluded the evidence was "inconclusive," but made important concessions during cross-examination.

Justice Moran preferred the bank's expert testimony, noting that Shetty's expert exhibited "excessive and unwarranted" caution despite acknowledging the signatures contained subtle features that would be difficult for a forger to replicate.

The background to the case stems from NMC Healthcare's dramatic 2020 collapse. The company, once the UAE's largest private healthcare provider, was placed into administration in April 2020 after discovering more than $4 billion in hidden debt. The scandal began in December 2019 when investment firm Muddy Waters published a report alleging financial irregularities.

NMC Healthcare made regular loan repayments until January 2020, but defaulted on interest payments in February 2020 as the company unraveled. Shetty resigned as joint non-executive chairman on February 16, 2020.

State Bank of India issued formal demand notices to Shetty in April and May 2020, which he initially claimed never to have received. The bank filed its lawsuit in May 2020 but struggled to serve proceedings during the pandemic. Shetty eventually filed his defense in October 2022.