NMC founder sues EY, banks and execs for $8 bln over alleged fraud
23 Jul 2021

B.R. Shetty, the founder of stricken UAE hospital operator NMC Health, has sued auditor EY, two former top executives of his companies and two banks in a U.S. court, seeking $8 billion in damages for an alleged multibillion-dollar fraud at his group.

EY said in a statement: “We believe this case is without merit and we intend to defend it vigorously.”

Several companies linked to the Indian entrepreneur ran into trouble last year after short-seller Muddy Waters questioned NMC’s financial statements.

NMC subsequently announced far higher debts than it had previously reported and was later put into administration.

Shetty, now in India, is himself facing a criminal complaint in Abu Dhabi from one of NMC’s lenders, Abu Dhabi Commercial Bank, and fighting court cases in India and Dubai as banks seek to recover loans from his companies. Last year, the UAE central bank ordered banks to freeze accounts of Shetty and members of his family, sources told Reuters. read more

Shetty has denied wrongdoing and says that he has been the victim of fraud.

In October, Shetty filed a complaint with Indian federal investigators, accusing brothers Prasanth and Promoth Manghat – respectively the former CEOs of NMC and Finablr, another Shetty group company -, along with their associates and bankers, of inflating the companies’ balance sheets, arranging “illegal” credit facilities and misappropriating funds since 2012.

In the case filed last week at a U.S. Supreme Court in New York, Shetty repeated his allegations against the Manghat brothers and also said EY had issued fraudulent audits and financial reports while being aware of the laundering of illegally obtained loan proceeds.

By Abhirup Roy, Reuters, 22 July 2021

Read more at Reuters

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