A $15 billion (around ₹1.43 lakh-crore) lawsuit filed by UAE-based Indian businessman BR Shetty has brought the collapse of his former healthcare empire, NMC Health, back into focus.
The legal battle, involving allegations of fraudulent transactions, forged signatures and financial misconduct, has also unsettled investors in Bank of Baroda, whose shares fell for a second consecutive session on Wednesday.
Shetty, the founder of NMC Health and UAE Exchange, filed the lawsuit in the Bombay High Court on October 13 against Bank of Baroda and 25 other defendants, including current and former bank officials. The businessman alleges that the bank and some of its employees facilitated financial irregularities that contributed to the collapse of NMC Health, once the Gulf region's largest private healthcare provider.
Bank of Baroda, however, said on Wednesday that it had not received formal notice of the lawsuit and would firmly defend itself if served with the court papers.
Shetty has accused Bank of Baroda and certain current and former employees of enabling fraudulent financial transactions involving NMC Health and its affiliated companies.
The key allegations include:
Fund diversion: Bank officials allegedly facilitated round-tripping transactions, where funds were routed through multiple entities to disguise their movement.
Money laundering warnings: The bank allegedly failed to act on repeated anti-money laundering alerts.
Forged signatures: Shetty claims that documents and personal guarantees bearing forged signatures were accepted in connection with loans.
Financial liabilities: He alleges that fraudulent transactions and unauthorised guarantees exposed him to substantial liabilities.
These are allegations made in the lawsuit and have not been established by a court.
Shetty is seeking compensation under three categories:
Direct damages: $5 billion
Consequential damages: $5 billion
Reputational damage: $5 billion
Total compensation sought: $15 billion
(The total claim is equivalent to approximately ₹1.43 lakh-crore)
The case centres on Bank of Baroda's lending arrangements with NMC Health and related entities in the UAE.
In a stock exchange filing on October 14, Bank of Baroda said it had seen reports of the lawsuit but had not yet been formally served.
The public sector lender said it could not comment on allegations that remained untested in court and would take the necessary legal steps to protect its interests.
The bank also disclosed that it was pursuing recovery and enforcement proceedings against Shetty in India and the UAE for outstanding dues of approximately ₹2,800 crore.
According to the lender, it has already obtained several legal decrees against the businessman. The bank also pointed to an earlier case filed by Shetty in New York involving similar allegations, which was dismissed in July 2024.
The dispute has its origins in the collapse of NMC Health, a major healthcare operator founded by Shetty in the UAE. The company was placed under administration in 2020 following revelations of financial mismanagement and previously undisclosed borrowings.
Its reported debt burden eventually reached $6.6 billion, significantly higher than the earlier estimate of $2.1 billion.
The latest lawsuit comes just three months after Bank of Baroda agreed to pay approximately $600 million to settle claims brought by administrators of NMC group companies.
The settlement was reached without an admission of liability. Shetty has argued that he was not a party to the agreement and that it does not prevent him from pursuing separate claims against the bank.
The developments triggered selling pressure in Bank of Baroda shares on the stock market. The stock declined 2.6% on Tuesday after reports of the lawsuit emerged.
On Wednesday, October 14, the shares extended their losses, trading around ₹231.40, down approximately 2.6%.