Bank of Baroda to defend $15 billion lawsuit by NMC Health founder BR Shetty

In a stock exchange notification on Wednesday, Bank of Baroda said it would take all necessary steps to protect its interests if and when it was served with the lawsuit.

In Short

• Bank of Baroda to firmly defend itself against $15 billion lawsuit by BR Shetty
• Lawsuit alleges bank officials aided fraud in NMC Health collapse
• Bank pursuing recovery of Rs 28 billion from Shetty in India and UAE

Bank of Baroda has said it will firmly defend its interests after BR Shetty, the UAE-based businessman who founded NMC Health, filed a $15 billion lawsuit against the lender and 25 other defendants in the Bombay High Court. Shetty has alleged that bank officials helped facilitate fraud linked to the collapse of the healthcare group, reported Reuters.

The lawsuit centres on Bank of Baroda's lending to NMC Health and its affiliated entities in the UAE. The lender said it had not yet been served with the suit and could not comment on allegations that had not been tested in court.

WHAT HAS BANK OF BARODA SAID?

In a stock exchange notification on Wednesday, Bank of Baroda said it would take all necessary steps to protect its interests if and when it was served with the lawsuit.

“The Bank has not been served with such a suit and cannot comment on the contents of pleadings which are untested in court. If and when the Bank is served, the Bank will defend the suit firmly and take all steps necessary to protect its interests,” mentioned the stock exchange filing.

The bank also said it was pursuing recovery and enforcement proceedings in India and the UAE against Shetty over outstanding dues of Rs 28 billion ($294.57 million). It added that it had obtained several decrees against him, according to the report.

The lender said it would not face any immediate liability unless an order was passed, or it was required to make a provision for potential damages.

WHAT IS THE $15 BILLION CASE ABOUT?

Shetty has accused Bank of Baroda and several current and former employees of helping facilitate fraud that contributed to the collapse of NMC Health, according to a court filing reviewed by Reuters.

The allegations include enabling round-tripping transactions, ignoring repeated anti-money laundering warnings and accepting documents bearing forged signatures.

Shetty is seeking $5 billion in direct damages, another $5 billion in consequential damages and an additional $5 billion for reputational harm, the report mentioned.

NMC Health was once the largest private healthcare provider in the Gulf region. The company was placed under administration in 2020 following months of financial mismanagement.

It subsequently disclosed debts of $6.6 billion, significantly higher than earlier estimates of $2.1 billion.

The latest lawsuit comes three months after Bank of Baroda agreed to pay $600 million to settle claims brought by NMC's administrators, according to the report.

At the time of writing, at 12 pm, Bank of Baroda shares were trading at Rs 231.70, declining by 2.48%.

- Ends