Dubai court issues worldwide freezing order on BR Shetty’s assets

NMC Health founder BR Shetty had a worldwide order freezing his assets issued at the request of a lender that claimed he had defaulted on a loan of more than $8 million (Dh29.4m).

The order was granted to Credit Europe Bank (Dubai) last month before a claim filed at the DIFC Courts against Mr Shetty, New Medical Centre Trading and NMC Healthcare.

The lender said in its claim they were “jointly and severally liable” for the repayment of money initially secured through a credit agreement in December 2013 and renegotiated in December last year.

Credit Europe Bank is an Amsterdam-headquartered institution that specialises in trade and commodities finance and has operations in nine countries.

The credit agreement was guaranteed by two security cheques that the bank said in its claim had been signed by Mr Shetty – one that was drawn on his personal account and another on the account of New Medical Centre Trading – that were “dishonoured upon presentation due to insufficient funds”.

The bank claimed Mr Shetty had “now fled the jurisdiction of the UAE to India” and that there was a risk of his “substantial” assets in the Emirates being dissipated.

The assets frozen include properties in Abu Dhabi and Dubai, as well as shares in NMC Health, Finablr, BRS Investment Holdings and other companies.

The order allowed for up to $7,000 to be spent each week on “ordinary living expenses and reasonable sum[s] on legal advice and representation”, a DIFC Courts document showed.

Credit Europe Bank declined to comment when contacted by The National, stating that it does not comment on ongoing litigation proceedings.

Representatives for Mr Shetty and NMC Healthcare, which is now being run by administrators Alvarez & Marsal, also declined to comment.

NMC Healthcare was founded by Mr Shetty in 1975 and grew from a single hospital into the UAE’s biggest privately owned healthcare operator, which employed 2,000 doctors and 20,000 other staff.

The company was listed on the London Stock Exchange and was valued at £8.58 billion (Dh40bn) at its peak. However, its shares slumped after short seller Muddy Waters Research issued a report in December 2019 alleging the company had inflated its cash balances, overpaid for assets and understated its debts.

This led to a string of damaging revelations by the company, including the fact that its debt was materially higher – at $6.6bn – than the $2.1bn on its balance sheet.

NMC Healthcare was placed into administration in April by its biggest creditor, Abu Dhabi Commercial Bank, but its UAE businesses continue to trade as a going concern.

Mr Shetty said in a statement issued in April that he has been a victim of fraud committed by "a small group of current and former executives" at companies owned by him. He said bank accounts were created in his name and transactions were made without his knowledge, and that loans, cheques and bank transfers were also fraudulently guaranteed in his name using his forged signature.

In response to the claim filed by Credit Europe Bank (Dubai) at the DIFC Courts, Mr Shetty said he did not personally guarantee loans made to NMC Trading or NMC Healthcare and that the signatures used on cheques guaranteeing the loans were forgeries.

His defence cited the opinion of “Dr Al Bah, an independent, experienced and qualified forensic document examiner”, that someone other than Mr Shetty signed the lending agreements and cheques.

An application by NMC Trading and NMC Healthcare to the DIFC Courts to have the claim against it heard in private for fear of triggering claims by other lenders was dismissed, given that the appointment of administrators at the group and allegations of fraud at the company are already in the public domain.

The group owes money to about 80 local, regional and international lenders.

Both companies indicated to DIFC Courts that they intend to contest the claim against them.