Businessman Shetty seeks India probe of NMC, Finablr ex-CEOs over $6 billion scandal

In this news, we discuss the Businessman Shetty seeks India probe of NMC, Finablr ex-CEOs over $6 billion scandal.

MUMBAI / DUBAI (Reuters) – Indian entrepreneur BR Shetty has filed a complaint with federal investigative agencies in India demanding an investigation into two former executives of his companies and two Indian banks related to a multi-billion dollar financial scandal engulfing his group.

Several companies linked to Shetty, including UAE’s leading hospital operator NMC Health PLC and payments firm Finablr PLC FINF.L, suffered serious financial strains this year after short seller Muddy Waters questioned the claims. NMC finances.

At issue, Muddy Waters said, were questions about NMC’s asset purchase prices and capital spending, which she said were both inflated.

NMC and Finablr subsequently announced much higher debts than they had previously reported.

Shetty’s 55-page complaint, a copy of which was seen by Reuters, accuses former chief executives of NMC and Finablr, along with their partners and bankers, of inflating corporate balance sheets, of arranging “illegal credit facilities” And embezzle funds since 2012.

He calls on the Indian Federal Police, the Central Bureau of Investigation (CBI) and the Law Enforcement Directorate (ED) – India’s financial crime agency – to investigate.

The complaint, with more than 100 pages of supporting documentation, says it was also sent to the Indian prime minister’s office, the central bank and other investigative agencies.

A spokesperson for the two former CEOs, brothers Prasanth and Promoth Manghat, dismissed Shetty’s claims, saying he had significant control over the management of NMC after he stepped down as CEO in 2017 and that he or his family remained on the boards of companies, including Finablr.

“These unsubstantiated allegations against Prasanth Manghat and Promoth Manghat are a clumsy attempt to distract from the skills and the real added value they bring to the success of NMC, Finablr… and Shetty’s own role in what’s happening. has passed, ”the spokesperson 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 the Prime Minister’s Office did not respond to requests for comment. India’s central bank declined to comment.

The High Court in London placed NMC under administration in April after reporting debts of $ 6.6 billion. UK firm Finablr said in March it was bracing for possible insolvency and warned a month later it could have nearly $ 1 billion more in debt than previously announced.

At a press conference on Wednesday, NMC directors Alvarez & Marsal said its investigative team was working with legal advisers to develop a strategy to recoup losses, which could run into billions of dollars, and to obtain compensation for the damages suffered by NMC as a result of the alleged fraud.

Finablr CEO Bhairav ​​Trivedi told Reuters last week that the company continues to cooperate with all relevant authorities who are investigating possible wrongdoing by former executives, advisers and bankers of the company.

Shetty, now in India and the subject of a criminal complaint himself in Abu Dhabi, is pursuing lawsuits in India and Dubai as banks seek to claw back loans from his companies. In April, the UAE’s central bank ordered banks to freeze accounts for Shetty and her family, sources told Reuters.

“We have submitted all the evidence for this complaint, which, if anyone examines it, will clearly conclude that Dr Shetty is innocent and that it all happened under his nose – unfortunately, behind his back,” the Shetty’s lawyer, Zulfiquar Memon of MZM Legal told Reuters.

Memon said the complaint was filed after a month-long internal investigation and investigative agencies are looking into the complaint.

Reporting by Abhirup Roy in Mumbai and Saeed Azhar in Dubai; Additional reporting by Davide Barbuscia; Editing by Nick Tattersall and William Mallard

Original © Thomson Reuters

Originally posted 2020-10-12 01:56:11.

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