Businessman Shetty seeks India probe of NMC, Finablr ex-CEOs over $6 billion scandal
Indian entrepreneur BR Shetty has filed a complaint with federal investigative agencies in India seeking a probe into two former top executives of his companies and two Indian banks related to a multibillion dollar financial scandal engulfing his group.
Several companies linked to Shetty, including top United
Arab Emirates hospital operator NMC Health PLC and payments firm Finablr PLC
FINF.L, have come under severe financial strain this year after short-seller
Muddy Waters questioned NMC's financials.
At issue, Muddy Waters said, were questions about NMC’s asset
purchase prices and capital expenditures, which it said were both inflated.
NMC and Finablr subsequently announced far higher debts than
they had previously reported.
Shetty’s 55-page complaint, a copy of which was seen by
Reuters, accuses the former chief executives of NMC and Finablr, along with
their associates and bankers, of inflating the companies’ balance sheets,
arranging “illegal” credit facilities and misappropriating funds since 2012.
It calls on India’s federal police, the Central Bureau of
Investigation (CBI), and the Enforcement Directorate (ED) - India’s financial
crime fighting agency - to investigate.
The complaint, with more than 100 pages of supporting
documents, indicates it was also sent to India’s prime minister’s office,
central bank and other investigative agencies.
A spokesman for the two former CEOs, brothers Prasanth and
Promoth Manghat, rejected Shetty’s allegations, saying he had significant
control over the running of NMC after stepping aside as CEO in 2017 and that he
or his family remained on the boards of companies including Finablr.
“These unfounded allegations against Prasanth Manghat and
Promoth Manghat are a clumsy attempt to distract attention away from the skills
and real value added by them to the success of NMC, Finablr ... and Shetty’s
own role in what has taken place,” the spokesman said in an emailed statement.
Bank of Baroda and Federal Bank, the Indian lenders named in
Shetty’s complaint, did not respond to Reuters request for comment.
The CBI, ED and prime minister’s office did not respond to
requests for comment. India’s central bank declined to comment.
London’s High Court placed NMC into administration in April
after it reported debts of $6.6 billion. UK-listed Finablr said in March it was
preparing for potential insolvency and warned a month later it might have
nearly $1 billion more in debt than previously reported.
In a news conference on Wednesday, NMC’s administrators
Alvarez & Marsal said its investigation team was working with legal
advisers to develop a strategy to recover losses, likely to be in the billions
of dollars, and obtain compensation for damage incurred by NMC as a result of
the alleged fraud.
Finablr’s CEO Bhairav Trivedi told Reuters last week the
company continues to cooperate with all relevant authorities that are
investigating potential wrongdoing by former management, advisors and bankers
of the company.
Shetty, now in India and himself facing a criminal complaint
in Abu Dhabi, is fighting court cases in India and Dubai as banks seek to
recover loans from his companies. In April, the UAE central bank ordered banks
to freeze accounts of Shetty and his family, sources told Reuters.
“We have submitted every shred of evidence into that
complaint, which, if anybody examines, will clearly conclude that Dr Shetty is
innocent and that all of that has happened under his nose - unfortunately,
behind his back,” Shetty’s lawyer Zulfiquar Memon of MZM Legal told Reuters.
Memon said the complaint was filed after a month-long
internal investigation and the investigating agencies are examining the
complaint.
Comments
Post a Comment