Federal investigative agencies in India have been requested by Indian entrepreneur BR Shetty to investigate two former top executives of his companies and two Indian banks in relation to a financial scandal engulfing his group that could run into millions of dollars.
Shetty filed a complaint with the agencies in relation to investigating a number of companies linked to Shetty, which includes the top United Arab Emirates hospital operator NMC Health PLC and payments firm Finablr PLC.
These companies have come under severe financial strain this year following NMC’s financials being questioned by short-seller Muddy Waters.
Questions about NMC’s asset purchase prices and capital expenditures were raised by Muddy Waters, which were both inflated, it said.
Far higher debts than they had previously reported were subsequently reported by NMC and Finablr.
Charges of inflating the companies’ balance sheets, arranging “illegal” credit facilities and misappropriating funds since 2012 have been brought against the former chief executives of NMC and Finablr, along with their associates and bankers, in his 55 page complaint with the Indian agencies by Shetty.
The entrepreneur urged investigation of the matter by India’s federal police, the Central Bureau of Investigation (CBI), and the Enforcement Directorate (ED) – India’s financial crime fighting agency.
The complaint was also sent to India’s prime minister’s office, central bank and other investigative agencies. It has more than 100 pages of supporting documents.
Rejecting Shetty’s allegations, a spokesman for the two former CEOs, brothers Prasanth and Promoth Manghat, said that after stepping aside as CEO in 2017, Shetty had significant control over the running of NMC and added that Shetty or his family were members of the boards of companies including Finablr.
“These unfounded allegations against Prasanth Manghat and Promoth Manghat are a clumsy attempt to distract attention away from the skills and real value added by them to the success of NMC, Finablr … and Shetty’s own role in what has taken place,” the spokesman said in an emailed statement.
Shetty named Bank of Baroda and Federal Bank, the Indian lenders, in his complaint. No comments from the banks on the issue were available.
There were also no comments available from the CBI, ED, prime minister’s office and India’s central bank.
After it reported debts of $6.6 billion, NMC was placed under administration in April by London’s High Court. While announcing in March that it was preparing for potential insolvency, the UK-listed Finablr warned in April that it might have nearly $1 billion more in debt thyan the company had reported previously.
Work in development of a strategy to recover losses was being conducted with the help of legal advisors and an investigation team, said NMC’s administrators Alvarez & Marsal in a news conference on Wednesday. It said that the debts could be in the billions of dollars.
“We have submitted every shred of evidence into that complaint, which, if anybody examines, will clearly conclude that Dr Shetty is innocent and that all of that has happened under his nose – unfortunately, behind his back,” Shetty’s lawyer Zulfiquar Memon of MZM Legal told the media.
(Adapted from News18.com)