An Indian tycoon BR Shetty, who stepped down as co-chairman of NMC Health LLC (NMC) early this year, has lodged a complaint seeking a probe into two former executives and two Indian banks over a $6 billion financial scandals. According to the Economic Times, Shetty has filed a written complaint to federal investigative agencies in India to look into the matter of alleged embezzlement, corruption, and laundering of money by Prasanth and Promoth Manghat.
Prasanth Manghat was the former Chief Executive Officer (CEO) of the United Arab Emirates (UAE) based NMC and was sacked from the company in February this year amid a financial probe against him. Prasanth’s younger brother Promoth Manghat, who spearheaded the London listing of Finablr Plc (Finablr), was also alleged to be connected with the widening scandal around NMC and stepped down from the United Kingdom (UK) listed payment service company.
Shetty, in his 55-pages complaint, alleged that the executives were involved in the mismanagement of companies’ finance with the help of two major banking companies namely Bank of Baroda and Federal bank. These two companies, co-founded by Shetty, have announced severe financial strain this year after a short-seller Muddy Waters questioned NMC’s financials.
Shetty’s Complaint against Two Executives
The business entrepreneur wrote complaints to federal agencies including the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED), requesting to begin an investigation against the charge of fund misappropriation of companies. In addition to this, the complaint having more than 100 pages including supporting documents was also sent to India’s prime minister’s office, the central banks, and other investigative agencies.
Shetty accused the brothers of arranging “illegal” credit facilities and misappropriating funds since 2012, which led to the inflation of the companies’ balance sheets. The financial situations of the companies came into limelight after Muddy Waters questioned about NMC’s asset purchase prices and capital expenditures, which it said were both inflated. It was found that NMC and Finablr subsequently announced far higher debts than they had previously reported.
A spokesman, representing the brothers Prasanth and Promoth Manghat, rejected Shetty’s allegations and said in an emailed statement, “These unfounded allegations against Prasanth Manghat and Promoth Manghat are a clumsy attempt to distract attention away from the skills and real value added by them to the success of NMC, Finablr … and Shetty’s own role in what has taken place.”
Existing Cases against Shetty
Currently, Shetty is facing a criminal complaint in Abu Dhabi and court hearing of some cases in India as central banks are trying to recover loans from the companies. In April, the UAE central bank ordered the country’s lenders to freeze Shetty and his family accounts, sources told Reuters.
Shetty’s lawyer Zulfiquar Memon of MZM Legal stated, “We have submitted every shred of evidence into that complaint, which, if anybody examines, will clearly conclude that Dr. Shetty is innocent and that all of that has happened under his nose – unfortunately, behind his back.”
Memon, meanwhile, added that Shetty filed the complaint after a group conducted a month-long internal investigation of the cases against the two executives. Last Week, Finablr’s CEO Bhairav Trivedi told that the company would fully cooperate with all relevant authorities that are investigating the matter of the two former executives and other associates involved in the case.
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