BENGALURU/UDUPI: Pharma entrepreneur and billionaire BR Shetty is facing a slew of charges in the UK and UAE after two of his top-notch companies, NMC Health and Finablr, were allegedly found to be involved in financial misgivings and flouting corporate governance rules.
A California-based research firm, Muddy Waters, has revealed in its report that NMC Health, which has an exposure to at least a dozen banks in the UAE, may have understated its debt by at least $4.5 billion and dressed up its accounts to show large margins as well as invested in assets that were too high to be plausible.
Shetty’s financial firm Finablr is found to have issued cheques worth $100 million without the knowledge of the company’s board. On April 26, the Central Bank of UAE instructed all financial institutions to freeze all bank accounts of the Udupi-based billionaire after a UK court placed NMC into administration (insolvency), based on an application filed by an Abu Dhabi bank, to which Shetty’s company owes nearly $981 million. Following the allegations, stocks of NMC and Finablr stopped trading at the London Stock Exchange (LSE). Shetty has resigned as NMC chairman, while many senior management employees have either quit or have been sacked.
Shetty set up his own health business, NMC, two-and-a-half decades ago in Abu Dhabi and rewrote the rules of the game, racing on to become the chairman of the biggest private healthcare provider in the UAE. His networth was $4.2 billion in 2018, according to the Forbes magazine. NMC Health was the only Abu Dhabi-based company listed on the LSE.
BR Shetty studying the case to fight back
Shetty’s plans were not restricted to healthcare alone. Early enough, he smelled an opportunity in the finance sector, tapping the immigrant market in the Gulf by setting up UAE Exchange for expatriates to send money back home. In 2003, he launched his own pharma manufacturing enterprise, Neopharma, in Abu Dhabi working with top brands like Pfizer, Merck etc. Meanwhile, Shetty, who is in Mangaluru without being able to fly back to the UAE due to flight restrictions, is in no mood to give up, according to sources close to him. He is said to be preparing to bounce back by contesting the case in the court in the desert nation.
Kushal Shetty, General Manager, BRS Health and Research Institute Pvt Ltd, told TNIE that BR Shetty’s move of believing anybody without suspecting their intent would have hurt him and his business. But the fact that he holds no responsibility in the administration of NMC Health for the last four years after a CEO was appointed is a pointer that BR Shetty has not committed any financial irregularities. “He used to only attend board meetings in his capacity as a member of the board,” he said.
BR Shetty came to see his ailing brother, who has since passed away, and is now staying at his brother’s house in Mangaluru. He is studying the case to put up a legal fight. The journey of Dr Shetty, who went on to become a billionaire, is awe-inspiring. Born in 1942 in Kaup, Udupi, his initial years were full of struggle. He contested the Udupi town municipal election in 1968 from Bharathiya Jana Sangh and won two consecutive terms.
It was alleged that it was Shetty who gave a Hublot watch to then chief minister Siddaramaiah which was at the centre of a big controversy. However, both denied the charges. A few years ago, he had also announced that he will make the most expensive film in Bollywood and develop Jog Falls in Sagar taluk of Shivamogga. But both the projects are yet to see the light of day.