Whilst all of us have read about what happened in Café Coffee Day or Gitanjali or Amtek Auto or DHFL or IL&FS, it is rare to read about an accounting blowup in the NRI community let alone a blowup which makes local Indian promoters look like babes playing in the wood. This ET story profiles BR Shetty, a man who migrated from Udupi in Karnataka to the Middle East with only $8 in his pocket, went on to become a billionaire and has now landed in hot water.
As recently as in 2018, Mr Shetty seemed to be on top of the world: “…here was not a cloud on the horizon for the Abu Dhabi-based billionaire-founder of NMC Health, then the biggest private healthcare company in the United Arab Emirates (UAE). Its 2012 IPO in the London Stock Exchange — the first for an Abu Dhabi-based company — was a blockbuster, raising £117 million. In 2014, he acquired UK-based forex major Travelex, paying £1 billion. A sprawl of smaller businesses that he owns across hospitality, education and pharma were all doing well…
Shetty embodied the ultimate immigrant dream in the Persian Gulf — a man from coastal Karnataka who arrived in the oil-rich West Asian deserts in the early 1970s with $8 in his pocket and went on to create a personal fortune estimated by Forbes to be $4.2 billion in 2018.”
Then in December 2019, Muddy Waters – the Singapore based shorting expert – nailed Mr Shetty. Their report on the LSE listed NMC Health said: “At the worst of times, the company has invested in large assets at costs that we find to be too high to be plausible – including from parties we believe are de facto under common control…NMC’s reported cash balances show two red flags that indicate they could be materially overstated…in our view, NMC also deliberately understated its debt by US$320 million as of FY18…”
What followed after the publication of the Muddy Waters report is little short of extraordinary: “A private investigation revealed it might have understated its debt by $4.5 billion in 2019. Shetty’s financial services firm Finablr, an LSE-listed enterprise that owns the remittance firm UAE Exchange, has discovered that $100 million worth of cheques were issued from the company without the board’s knowledge. Top executives at both firms have either resigned or been sacked. LSE has suspended trading in the stock of both the companies. NMC Health has been placed in administration. Shetty himself stepped down as director and joint non-executive chairman of NMC Health in February and is now facing criminal charges in Abu Dhabi allegedly for fraud and forgery.
Trading in the NMC stock was suspended in London in February. It had fallen by more than 60% from the levels that prevailed just ahead of the report (November 26)…NMC reportedly owes money to over 80 financial institutions. On March 24, NMC Health informed the LSE that the group’s debt was estimated to be $6.6 billion…”

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