The Udupi-born businessman is facing criminal charges in Abu Dhabi allegedly for fraud and forgery.

BR Shetty admits serious fraud in companies blames group of executives for it
news Business Thursday, April 30, 2020 - 08:03

BR Shetty, the founder of troubled healthcare operater NMC Health on Wednesday claimed that a probe conducted by his own advisors had found alleged fraud at NMC and payment services group Finablr. The statement put out by the billionaire based out of Abu Dhabi admits serious frauds in the company, but pins the blame on a 'small group of executives' and completely absolves Shetty who currently faces charges in Abu Dhabi.

In a statement released to the media, BR Shetty said, "The preliminary findings provided by my advisors from my own investigations indicate that serious fraud and wrongdoing appears to have taken place at NMC, Finablr PLC (‘Finablr’), as well as within some of my private companies, and against me personally. This fraud also appears to have been undertaken by a small group of current and former executives at these companies."

BR Shetty's flagship company NMC Health is the largest private healthcare provider in the United Arab Emirates and was founded by him in the 1970s. It was placed under the United Kingdom court's supervision earlier this month over allegations of accounting frauds. The company was accused of understating its debt by 4.5 billion dollars.

In his statement, BR Shetty stated that bank accounts were operated in his name to engineer fradulent money transfers that he did not know about. He also stated that companies were set up in his name without his knowledge. Similarly, he stated, loans, cheques, personal guarantees and bank transfers were created in his name using a forged signature. In addition, he cited misleading financial statements, information regarding the performance of his companies and the payment of expenses using personal bank accounts.

"My advisors and I have therefore shared information and evidence from our findings with all relevant boards, as well as with relevant law enforcement and regulatory authorities. We will Continue to proactively share this information as this work continues and in order to assist these Parties with their own investigations and inquiries," he stated. 

On April 15, the Abu Dhabi Commercial Bank, which has around 3 billion dirham exposure in NMC Healthcare, filed a criminal complaint against Shetty, former CEO Prasanth Manghat and others alleging serious fraud. The bank wanted the accounts of all the accused to be seized.

Though the controversy has been going on for months, Shetty has maintained a studious silence. In his statement he says that this 'restraint in speaking out has come at great personal cost to hin both by reputation and materially'. 

He, however, claimed that this was the right time to speak up as his own legal and forensic investigations were showing inital findings.

He also expressed regret over the hardships faced by his employees, "My greatest regret is for the thousands of hardworking employees in the companies we established who are now enduring extreme uncertainty and hardship, especially during the current public health crisis. It also pains me to see the damage caused to my business partners, shareholders and other  stakeholders who we have worked with for so long," he said.

Who is BR Shetty?

Bavaguthu Raghuram Shetty, who hails from Udupi in coastal Karnataka, grew up in a family of farmers along with three brothers and three sisters. He belongs to the Tuluva Bunt community and for residents in coastal Karnataka, his was the ultimate success story - the story of a man who left Udupi with very less money in pocket to work as a medical representative in UAE and then went on to create a business empire that saw him take possession of two floors on the Burj Khalifa building. His wealth was estimated by Forbes to be $4.2 billion in 2018.

Things began to unravel for BR Shetty when California based firm Muddy Waters questioned the financial reporting of NMC Health in 2019. The firm revealed that NMC Health which deals with several banks in UAE, has understated its debt by at least $4.5 million. In addition, BR Shetty's financial services Finablr discovered that $100 million worth of cheques were issued without consent or knowledge of the company's board. Top executives at both these firms have either resigned or been removed. The London Stock Exchange also suspended trading in the stock of both companies in February. BR Shetty, who has stepped down from his executive roles in NMC Health now faces criminal charges in Abu Dhabi allegedly for fraud and forgery. 
 
BR Shetty, however, said that he intended to clear his name and ensure that the missing funds are returned to the rightful owners."I intend to work tirelessly to clear my name and assist any authorities in getting to the truth and help them ensure that misappropriated or missing funds are returned by the perpetrators to their rightful owners," stated BR Shetty in his statement.

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