ADGM Court Holds NMC Founder BR Shetty Liable for $5.4 Billion Fraud

The Abu Dhabi Global Market (ADGM) Court of First Instance has ruled that NMC Health founder Dr Bavaguthu Raghuram Shetty and former senior executive Prasanth Manghat are liable for fraudulent and wrongful trading, according to reports of the judgment. Presiding Justice Sir Andrew Smith established US$5.397 billion as the starting point for assessing the financial contributions both individuals must pay toward the assets of the collapsed healthcare group.

The judgment concluded that the operations of NMC Healthcare Limited and 34 other entities within the NMC Group were carried on fraudulently between April 2012 and April 2020. The court held that both Shetty and Manghat knowingly participated in the fraudulent trading scheme, which involved inflating balance sheets, concealing billions of dollars in commercial borrowings, and misappropriating corporate funds.

Judicial scrutiny detailed in the ruling showed that more than 500 financial transfers totaling AED 4.18 billion were made directly into Shetty's personal bank accounts, resulting in net transfers of roughly AED 2.6 billion after accounting for funds returned to the business. The court found that these diverted funds funded private luxury expenditures, including real estate acquisitions in Dubai Hills, private aircraft, and investments in a Wyoming oil field.

The proceedings arose from claims brought under UAE law and the ADGM Insolvency Regulations by administrators of NMC Healthcare and NMC Holding, alongside parallel litigation brought by Abu Dhabi Commercial Bank. The court clarified that the precise individual apportionment of payable contributions, accrued interest, and legal costs will be determined after hearing further submissions.