Accounts frozen across B R Shetty’s empire
The fallout from the collapse of NMC Healthcare and the subsequent freezing of accounts of the company’s founder, BR Shetty, is having a knock-on effect on other parts of his business empire.
As a consequence, he has been unable to pay staff at his Neopharma business and other companies.
Mr Shetty told The National he was “really sorry” about the situation that banks are in as a result of NMC Health’s collapse, but added that “without proof, they have taken this action” to freeze his accounts. Banks in the UAE alone have reported an exposure of at least Dh7.5 billion to NMC Health and some lenders have already begun writing down the value of these.
“As a result, all my other companies are suffering,” he said. “Even Neopharma, the salary I can’t pay because of the blockage of the funds.”
“I have not taken one dollar” from NMC Health, said Mr Shetty. The company was placed into administration in April with debts of $6.6bn (Dh24.2bn) owed to more than 80 lenders.
The once-towering figure said he has provided his own forensic report to NMC Health detailing transactions involving millions of dollars moving through accounts without his knowledge. Mr Shetty also said he has filed his own complaint to the criminal court in Abu Dhabi.
NMC Health’s administrators, Alvarez & Marsal, declined to comment. “But I am now like the orphan. Nobody is hearing me,” Mr Shetty said.
“I have not paid the salary last month. I paid the salary [but the] bank is not accepting. Whom to cry [to]? I don’t want to be a defaulter.
“And [those] who took the money, who siphoned the money, they have fled the country. I gave the names. There is a criminal case registered in Abu Dhabi courts.”
A report by short seller Muddy Waters Research in December that alleged NMC Health had overstated its assets and under-reported its debt sparked an independent investigation that uncovered billions of dollars worth of unreported third-party liabilities, which ultimately led to NMC Health being placed into administration in April.
The Muddy Waters report also detailed share sales and equity collar transactions carried out in Mr Shetty’s name that generated more than $500 million over a two-year period. However, Mr Shetty said he had provided evidence that this, and other sums, had been siphoned off by former staff members.
“Seventeen people – I gave the names – who are involved in siphoning money,” he said. “Our own junior and senior staff.”
Bank of Baroda in India is looking to recover loans worth more than $250m from Mr Shetty. A court has barred him from selling 16 properties in the country while the case is being heard, Reuters reported last week.
Mr Shetty described the action as “unwarranted”, stating that he met managers and agreed to provide properties as collateral, but that he would deal with it at a later date.
The bank then secured its order banning asset sales, which he said he intends to have lifted in courts. Bank of Baroda did not respond to requests for comment.
“Everywhere I see cases after cases. Because of the personal guarantees I gave,” he said.
“I came to the [UAE] without anything. I don’t mind going back without anything. But I don’t want the trauma. I had a very good life in Abu Dhabi,” Mr Shetty said.
“I am not a fraud. I am a plain man,” he continued. “Why penalise me and my other businesses? Why block my bank accounts to pay the salaries and the ongoing business?”
He reiterated his plan to return to the UAE, and said that with the support of the government and its bankers, he would rebuild his business empire. He described UAE Exchange, the currency exchange company that is currently under supervision by the Central Bank of the UAE, as “a flag of mine” and of the country. “I’ll never allow that to come down,” he said.
UAE Exchange is part of the Finablr Group, which listed on the London Stock Exchange last year in a deal valuing it at more than £1.2bn (Dh5.4bn). The company also recently announced liquidity problems and the discovery of previously unreported debts of $1bn, bringing its total debt to $1.3bn. Its shares have been suspended from trading since March.
Mr Shetty, who remains as co-chairman and majority shareholder of the group, said he is confident about its future and is working on bringing in external investment.
“We are working on it – on getting a good investor,” he said.
Asked how long this would take, he said “within a month, maximum”.
Mr Shetty said that with the support of the government and its bankers, he would rebuild his empire