Have you heard about BR Shetty from NMC Health? Considered an avid supported of PM Narendra Modi in the UAE the story of BR Shetty & his company NMC Health is shattering and yet very inspiring.
“Be careful what you wish, for wishes do come true,” the maxim seems to be true in the case of Bavaguthu Raghuram Shetty (BR Shetty) who in an interview in 2018, remarked, “If I don’t have one problem a day, that’s not a good day for me. I should have a problem, solve it and then feel satisfied.”
BR Shetty & NMC Health
BR Shetty’s wish seems to have come true as he has been overwhelmed with problems ever since his fortunes dwindled after becoming one of first Indians to make his fortune in the UAE’s healthcare industry when he set up NMC Health in the 1970s and grew it exponentially.
BR Shetty was the living embodiment of the Indian economic dream. He was born in Kaup, Udupi in Karnataka and worked as the Vice Chairman of the Municipal Council in Udupi.
Shetty set sail for the oil-rich Gulf country of United Arab Emirates in 1973 with nothing but a pharmaceutical degree and just $8 out of which he built a massive $4.2 billion enterprise by 2018 according to Forbes.
Muddy Water Spills On NMC Health & BR Shetty
However, his woes started to overflow soon after when short-seller Carson Block of Muddy Waters Research wrote a damning report accusing NMC Health of fraudulent asset values and theft of company assets.
The tweet dropped like a bomb on New Medical Centre, UAE largest private healthcare provider founded by BR Shetty. Immediately the share price tanked which surprised Muddy Waters as they had not mentioned the name of the company against whom they were going to initiate the campaign.
The report mentioned that NMC health had understated its debt by $4.5 billion. His financial firm Finablr that owns UAE Exchange found that $100 million worth of cheques were issued without the board’s knowledge.
Top executives of both firms were sacked and LSE suspended trading of both the companies. BR Shetty himself had to step down as director and chairman of NMC health and is facing criminal charges for fraud and forgery in Abu Dhabi.
BR Shetty In A Soup Over Loans
NMC reportedly owns money to 80 institutions and according to Bloomberg. NMC Health owes Abu Dhabi Commercial Bank (ADCB) $963 million, Dubai Islamic Bank $541 million, Abu Dhabi Islamic Bank $325 million, Standard Chartered $250 million and Barclays $146 million.
Shetty, since the report has emerged, has flown back to India and has promised full disclosure of the all that transpired.
BR Shetty like his father served the Municipal Council of Udupi early in his teen years. Although his father was a Congress loyalist, Shetty was drawn towards the then-popular leader and later India’s Prime Minister Atal Behari Vajpayee who he used to drive in his car whenever he visited their area.
His business as a distributor for a Pune based Pharmaceutical Company soon was disturbed due to his political activities which forced him to take a loan to fund his sister’s wedding. That incident left an indelible mark on Shetty who decided to move UAE to make his fortune.
With his hard work, dedication and passion he incorporated NMC which also became the first healthcare company from the country to be listed on LSE and be a part of FTSE100 Index and MSCI Global Index.
Its IPO was a hit as it raised 117 million pounds. His company catered to 8.5 million patients annually across 200 facilities in 17 different countries. Shetty then went on to form UAE Exchange a major remittance firm in 1980 which served 15 million customers and had a strong fiscal tie-up with around 140 banks.
He also founded pharmaceutical manufacturing company Neopharma in 2003 which was inaugurated by then Indian President APJ Abdul Kalam. Shetty had also signed up to be part of the Giving Pledge — a campaign by Bill Gates and Warren Buffett — committing to donate to charity at least half of his personal fortune.
Can Freeh Group Free BR Shetty Of Fraud Allegations?
Since the company’s and BR Shetty’s fortunes took a nosedive, NMC Health appointed Freeh Group, headed by a former FBI (Federal Bureau of Investigation) director, to investigate the charges. The investigation found that unknown to the board and the stock market, the company had entered into a $335 million financing arrangement with entities controlled by Shetty and another main shareholder, Khaleefa Bin Butti.
There was also confusion about how much stake each shareholder-owned, with the company revealing that few principal shareholders had misstated their claim. Finablr which thought it would remain unscathed by the troubles at NMC found that it had unaccounted cheques of USD 100 million issued to third parties.
The most damaging aspect of all was that NMC’s debt was revealed to be 6.6 USD billion which was way higher than initial reports. Shetty earlier has stated to return to Abu Dhabi and fulfil his obligations after the coronavirus tide subsides.
Via: Economic Times