Indian entrepreneur BR Shetty has filed a complaint with federal investigative agencies in India, seeking a probe into two former top executives of his companies and two Indian banks linked to the multibillion dollar scandal engulfing his business empire.
Several firms linked to Shetty including UAE hospital operator NMC Health and payments firm Finablr have come under severe financial pressure after short seller Muddy Waters raised concerns about NMC’s accounting last year.
Muddy Waters accused NMC Health of inflating its asset prices and capital expenditures. Both NMC and Finablr, which owns foreign exchange firm Travelex, have since disclosed billions of dollars of debt that had not been previously reported.
Shetty’s complaint to Indian authorities, seen by Reuters, accuses the former chief executives of NMC and Finablr, along with their associates and bankers, of inflating the companies’ balance sheets, arranging “illegal” credit facilities, and misappropriating funds since 2012.
The complaint calls on India’s federal police, its Central Bureau of Investigation, and its financial crime fighting agency to investigate. The document was also sent to the Indian Prime Minister’s office, central bank, and other investigative agencies.
A spokesperson for the two former chief executives, brothers Prasanth and Promoth Manghat, rejected Shetty’s allegations.
They said Shetty had significant control over the running of NMC after stepping aside as CEO in chief executive and that he or his family remained on the boards of companies including Finablr.
“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,” the spokesman said.
Bank of Baroda and Federal Bank, the Indian lenders named in Shetty’s complaint, did not respond to a request for comment from Reuters.
The High Court in London placed former FTSE 100 firm NMC into administration in April after the company reported debts of $6.6bn (£5bn).
Finablr said in March that it was preparing for potential insolvency, warning a month later that it may have almost $1bn more debt than previously disclosed. The UK-listed firm approved a takeover offer from software firm Prism Advance Solutions last week.
NMC’s administrators, Alvarez & Marsal, said last week that its investigators were working with legal advisors to develop a strategy to recover losses, which are likely to run to billions of dollars, and obtain compensation for damage incurred to the healthcare provider resulting from the alleged fraud.
Finablr chief executive Bhairav Trivedi said last week that the company is continuing to cooperate with all relevant authorities.
Shetty, is facing a criminal complaint in Abu Dhabi and fighting court cases in India and Dubai as banks seek to recover loans from his companies
In April, the UAE central bank ordered banks to freeze accounts of Shetty and his family, Reuters reported.
“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,” Shetty’s lawyer told Reuters.