Court Orders BR Shetty to Pay $46 Million to SBI
A recent ruling from Dubai’s DIFC Court has mandated BR Shetty, the founder of NMC Healthcare, to pay nearly $46 million to the State Bank of India (SBI). The judgment, delivered by Justice Andrew Moran on October 8, highlighted significant discrepancies in Shetty’s testimony during the trial, which took place on September 29. The court found his statements to be untruthful and lacking credibility.
Key Findings of the Judgment
Justice Moran’s 70-paragraph ruling characterized Shetty’s testimony as “an incredible parade of lies.” The judge noted that there was substantial evidence, both from witnesses and documents, proving that Shetty had lied under oath regarding his denial of signing a Personal Guarantee for a loan. The court awarded SBI a total of $45,997,554.59, which includes interest accrued up to the judgment date, with additional interest set at 9% per annum until the payment is made.
Details of the Case
During the proceedings, it was revealed that Shetty initially claimed he was unaware of the loan facility. However, he later had to concede that he was indeed aware when confronted with an email he sent in May 2020. In this email, Shetty acknowledged discussions with SBI about his guarantee and requested time to review the relevant documents. Justice Moran noted, “It turns out… that he was fully aware of and had admitted he had signed the Personal Guarantee back in May 2020.”
The CEO of SBI, Anantha Shenoy, testified that he visited NMC’s Abu Dhabi offices on December 25, 2018, specifically to witness Shetty sign the guarantee. He provided photographic evidence and a detailed report from a subsequent meeting, where Shetty expressed gratitude for the $50 million loan.
Shetty’s Defense and Court Reactions
In his defense, Shetty attempted to downplay the significance of the photographs, suggesting that bank officials must have staged the moment when he was photographed with the chairman. He claimed that the meeting was merely a networking opportunity. However, the judge dismissed these explanations as unconvincing, stating, “I found Mr. Shetty’s attempts to bolster his evidence… to be false and discreditable maneuvering.”
Shetty’s testimony included peculiar claims, such as alleging that NMC employees held competitions to forge his signature, with the prize being “the suffering he is being caused now.” The court also examined expert handwriting analyses. The bank’s expert found compelling evidence that Shetty’s signatures matched the questioned ones, while Shetty’s expert deemed the evidence inconclusive but made significant concessions during cross-examination.
Background Context
This case is rooted in the dramatic collapse of NMC Healthcare in 2020, which was once the largest private healthcare provider in the UAE. The company was placed into administration in April 2020 after revealing over $4 billion in hidden debt. The financial scandal began in December 2019 when the investment firm Muddy Waters published a report alleging financial irregularities.
NMC Healthcare had been making regular loan repayments until January 2020 but defaulted on interest payments in February 2020, leading to Shetty’s resignation as joint non-executive chairman on February 16, 2020. SBI issued formal demand notices to Shetty in April and May 2020, which he initially claimed he had not received. The bank filed a lawsuit in May 2020 but faced challenges serving the proceedings during the pandemic. Shetty eventually submitted his defense in October 2022.
FAQs
What was the basis of the court’s ruling against BR Shetty?
The court found that Shetty provided false testimony regarding his awareness and signing of the Personal Guarantee for a loan, supported by substantial documentary and witness evidence.
How much is BR Shetty required to pay to the State Bank of India?
Shetty has been ordered to pay $45,997,554.59, which includes interest up to the judgment date, with additional interest accruing at 9% per annum until the payment is made.
What led to the collapse of NMC Healthcare?
NMC Healthcare collapsed in 2020 after revealing over $4 billion in hidden debt, following allegations of financial irregularities published by an investment firm.
Conclusion
The DIFC Court’s ruling against BR Shetty underscores the serious implications of financial misconduct and the importance of accountability. As the case progresses, it remains to be seen how Shetty will respond to the judgment and whether the State Bank of India will successfully recover the awarded amount.
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