Abu Dhabi Court Holds NMC Founder BR Shetty Liable for $5.4B Fraud
In an extensive civil judgment, the Abu Dhabi Global Market judicial body found hospital magnate Dr Bavaguthu Raghuram Shetty and former senior executive Prasanth Manghat responsible for unlawful balance-sheet manipulations. Delivering the commercial ruling in Abu Dhabi, Justice Sir Andrew Smith of the ADGM Court of First Instance determined that both corporate leaders engaged in calculated financial dishonesty. The judicial ruling established 5.397 billion dollars as the baseline starting point for assessing the restitution payments the defendants must make toward the enterprise's depleted assets. The tribunal affirmed that the operations of NMC Healthcare Limited alongside 34 other corporate entities within the NMC Group were conducted fraudulently over an eight-year timeframe. Litigation proceedings were pursued by the Joint Administrators, designated as the JA Claimants, acting on behalf of institutional creditors and collapsed corporate units.
ADGM Liability Finding and Restitution Baseline
The commercial dispute originated from the 2020 collapse of the multinational medical conglomerate, which Shetty established in Abu Dhabi in 1975. NMC Health subsequently expanded into the United Kingdom, achieving a premier London Stock Exchange listing in 2012 and joining the prestigious FTSE 100 index. Court forensic analysis documented that corporate executives systematically misappropriated corporate capital while disguising billions of dollars in off-balance-sheet borrowings. Judicial records revealed more than 500 unauthorized transfers routed directly into Shetty's personal bank accounts, totaling approximately 4.18 billion Emirati dirhams. After accounting for interim capital returned to corporate treasuries, net personal diversions amounted to approximately 2.6 billion dirhams.
Unauthorized Transfers and Balance Sheet Falsification
Siphoned corporate proceeds funded lavish personal acquisitions, including luxury residential villas in Dubai Hills, private executive aircraft, and investments in a Wyoming oil field. The extensive financial deception concealed massive balance-sheet shortfalls through fabricated supplier contracts and sham billing arrangements. By December 2018, the healthcare group had accumulated roughly 3.88 billion dollars in undisclosed commercial debt while formally reporting borrowings of merely 1.99 billion dollars. The court observed that the JA Claimants advanced persuasive arguments demonstrating that Shetty and executive Mr Jayakumar coordinated liability settlements to avoid regulatory exposure. Those coordination arrangements involved institutional borrowings linked to Bank of Baroda to conceal the actual state of regional corporate accounts. Bank of Baroda, originally the third defendant in the ADGM action brought by NMC Healthcare's joint administrators, settled with the administrators towards the end of the trial, leading to the discontinuance of claims against it, according to LawChakra. Financial experts quantified direct unlawful payments within the NMC Group at about US$ 1,587 million to US$ 1,589 million, with joint administrators claiming approximately US$ 278.7 million in advisory and professional fees, according to LawChakra.
Insolvency Governance and International Asset Recovery
Civil claims were adjudicated under regional statutory provisions and the formal framework established by the ADGM Insolvency Regulations. The judicial tribunal dismissed Shetty's defense arguments alleging lack of operational oversight, affirming that executive signatures and continuous capital withdrawals demonstrated active awareness. The court indicated it will determine final individual monetary awards assessed against Shetty and Manghat respectively following subsequent legal proceedings. The judgment concludes an important phase in the multinational insolvency and corporate governance proceedings. Creditor financial consortiums across the United Arab Emirates and international jurisdictions will leverage the civil judgment to pursue global asset recovery actions. A further hearing before the ADGM Court will determine statutory interest and costs, deal with claims against other defendants, and settle the terms of the court's orders, according to LawChakra.
Background
The administrators and ADCB have been asked to prepare draft orders to settle the terms of the Court's orders, which remain findings of a civil court of first instance and remain open to challenge in accordance with law, according to LawChakra.