DIFC court orders NMC Healthcare founder BR Shetty to pay $46m to State Bank of India

Indian businessman lied under oath about signing a personal guarantee for a $50 million loan, judge rules

BR Shetty, founder and chairman of NMC Healthcare. Christopher Pike / The National

A Dubai International Finance Centre (DIFC) court has ordered NMC Healthcare founder and former chief executive BR Shetty to pay $46 million to State Bank of India after ruling that he lied under oath about signing a personal guarantee for a $50 million loan.

In a judgment issued on October 8 and posted on the court’s website, Justice Andrew Moran described Mr Shetty’s testimony as “an incredible parade of lies, of confusing and inconsistent inventions and denials”, during the trial.

The case dealt with whether Mr Shetty signed a personal guarantee in December 2018 for a $50 million loan given to NMC Healthcare.

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The loan was repayable in 20 quarterly instalments of $2.5 million each and interest was payable at monthly intervals. NMC Healthcare only made the quarterly repayments of principal due for the quarters ending March, June, September and December 2019, and monthly payments of interest on their due dates until January 30, 2020, the ruling showed.

Mr Shetty denied meeting the bank’s chief executive or signing any document, claiming his signature was forged. However, he later admitted it was his when confronted with photographs, meeting notes and an email from his own account from May 2020.

In the email, Mr Shetty acknowledged discussions with the bank about his guarantee and asked for time to review documents, the ruling said.

“There is overwhelming witness and documentary evidence before me, which satisfies me that Mr Shetty has come before this court and lied on oath in his multiple denials that he signed the personal guarantee, the corporate guarantee and the facility sanction letter,” Mr Moran wrote.

“Mr Shetty’s evidence under cross-examination was at times incoherent and nonsensical. He did not answer questions asked and made assertions that were inconsistent with his own evidence elsewhere and/or with incontrovertible, undisputed facts. For example, agreeing that there was a facility agreement between the bank and NMC in one sentence and then asserting it was all fabricated.”

The ruling awards the state-run Indian bank $46 million, including interest to the judgment date, with additional interest accruing at 9 per cent per year until payment.

NMC Healthcare was founded by Mr Shetty in 1975. It grew from a single clinic to become the UAE’s biggest privately owned healthcare operator, employing thousands of people. The company’s shares were listed on the London Stock Exchange in 2012 and at its peak in 2018, it was valued at £8.58 billion ($10.5 billion).

However, the business crashed after a report from short seller Muddy Waters in December 2019 alleged that the company had inflated the value of its assets and understated its debt. An independent investigation uncovered more than $4.4 billion of previously unreported debt, leading to the company being placed into administration in April 2020.

In 2022, the restructuring process was completed and allowed 34 NMC companies to exit administration and become subsidiaries of a new group. NMC Healthcare said its board appointed David Hadley, former chief executive of Mediclinic Middle East, as the group’s new chief executive.

In 2021, Mr Shetty also filed a case in the courts in New York accusing former directors, two banks and the company’s former auditors of conspiring to “artificially inflate the financials of NMC” and other group companies.

Documented meeting

State Bank of India chief executive Anantha Shenoy said in his testimony that he travelled to NMC's Abu Dhabi offices on December 25, 2018, to witness Mr Shetty sign the guarantee.

He provided photographs and a detailed meeting report from January 13, 2019, showing Mr Shetty thanking the bank’s chairman for the $50 million loan.

BR Shetty claimed there was a competition among NMC employees to copy his signature. Delores Johnson / The National

However, Mr Shetty claimed the meeting was merely for networking purposes.

“I found Mr Shetty's attempts to bolster his evidence that he did not sign the documents by stating he had never met Mr Shenoy to be false and discreditable manoeuvring, designed to evade his liability under the guarantee,” the DIFC judge wrote.

“Whilst it may be true that Mr Shetty formally stepped back from his role as an executive in NMC in 2017, there is abundant evidence of his very active support for and close involvement in this borrowing by it in 2018.”

Prize for forged signature

Mr Shetty told the court that there was a competition among NMC employees on who can copy his signature and there was a prize for that. On being asked what the prize in the competition was, he said it was the suffering he is enduring now.

However, handwriting experts confirmed that the signatures on the personal guarantee letter, sanction letter and related documents matched Mr Shetty’s handwriting.

He also alleged that the $50 million loan was a scam between the bankers and management in which they looted and made money from NMC.