NEW DELHI: The Enforcement Directorate has asked Indian banks to freeze assets and accounts of Mangath brothers – Prasanth Mangath and Promoth Mangath – in a multi-billion dollar fraud case involving NMC group, the biggest healthcare company of West Asia.
NMC group founder Dr B R Shetty has been accused by Abu Dhabi Commercial Bank (ADCB) of availing a billion dollar credit facility through misrepresentations and conspiracy. In December 2020, the ADCB obtained a worldwide freeze order against NMC from a London court. Many other banks have made similar accusations against him taking the total scam into billions of dollars. There are also accusations of NMC siphoning off loan amounts received from banks.
Dr Shetty, however, has claimed that he was not a culprit but a victim of a scam by his senior officials including former CEO and director Prasanth Mangath and his brother Promoth Mangath, who was also a senior executive in the group. Dr Shetty has filed a case against the Mangath brothers and is contesting the London court’s freezing order against him. He claims that the guarantees given to banks on his behalf were forged by the Mangath brothers.
Bringing a new twist in the tale, the ED has reportedly discovered that several hundred crores of rupees were brought into their Indian accounts by the Mangath brothers. This money, ED suspects, could be related to the NMC fraud case.
In a letter dated 24.03.22 to the HDFC Bank, Darragh Smail Centre, 5th Cross, Willingdon Centre, Cochin, the ED informed the bank that the Mangath brothers have multiple accounts in their branch, and requested the bank not to allow any transactions as the properties and assets related to the accounts and account holders were “proceeds of crime”.
The ED has sought full details of transactions in these accounts of Mangath brothers, especially the foreign inward remittances.
Sources said similar letters were sent by the ED to many other banks, including Axis bank and Bank of Baroda.
The notices to banks were issued under Section 54 of Prevention of Money Laundering Act (PMLA), 2002 by the deputy director of ED’s Cochin zone.
Based on its preliminary inquiries, the ED had registered a case vide ECIR No. KCZO/06/2022 on 17.02. 2022 under PMLA against the two Mangath brothers and others. The ED case was based on an FIR registered by the Kerala Police in the case.
The bank fraud relating to NMC Plc, which is a listed company on London stock exchange, came to light when the US financial research company Muddy Waters came out with a report on NMC in December 2019. It turned out that the company was taking fresh loans without revealing its previous debts that ran into US$ 4-5 billions.
Dr Shetty is an Indian belonging to the state of Karnataka. His company runs over 200 clinics and hospitals in 19 countries of West Asia. Dr Shetty shares close personal rapport with Prime Minister Narendra Modi and was one of the key sponsors of Mr Modi’s public meeting held in a Dubai stadium in 2015. It is said that Dr Shetty had installed so many air conditioners in the stadium that the temperature in the open-air stadium came down from a scorching 45 degrees to a pleasant 28 degrees.