Dubai: BR Shetty, founder of NMC Healthcare and UAE Exchange, has filed a $15 billion legal claim against Bank of Baroda and 25 other defendants, alleging that they enabled financial fraud involving his businesses and left him facing repayment demands under personal guarantees he claims he never signed.

According to Reuters, which reviewed the court filing, Shetty filed the lawsuit in the Bombay High Court on Tuesday. The allegations include forged signatures, unauthorised fund transfers and the alleged failure of the bank to act on repeated money-laundering alerts.

Bank of Baroda said on Wednesday that it had not been served with the lawsuit and that the allegations had not been tested in court. The lender said it would defend itself firmly while continuing recovery proceedings against Shetty for approximately Rs 28 billion in outstanding dues.

The legal action opens another front in the continuing fallout from the collapse of NMC Healthcare, which was once the largest private healthcare provider in the Gulf region.

Disputed signatures at the centre of the lawsuit

A central issue in Shetty’s lawsuit concerns personal guarantees and other financial documents that he alleges bear forged signatures. He claims that the bank relied on these documents to pursue repayment without adequately verifying their authenticity.

A personal guarantee makes an individual liable for a borrower’s debt if the borrower fails to meet repayment obligations. The dispute over the signatures could therefore have significant implications for Shetty’s personal financial liability and the recovery proceedings initiated against him.

Shetty has alleged that he did not authorise the guarantees being used to pursue him for outstanding dues. His legal action seeks to challenge the validity of the documents and establish how they were created, verified and relied upon.

The lawsuit also raises questions about account instructions and financial transfers that Shetty claims were unauthorised.

He has asked the court to require the disclosure of transaction instructions, account-opening documents, customer verification records and information about officials who handled or verified the disputed transfers.

These records could be relevant to determining how the transactions were authorised and whether the bank followed the required verification procedures.

Bank of Baroda and 25 other defendants named

The lawsuit names 26 defendants, including Bank of Baroda, 10 of its officials, former NMC executives Prasanth Manghat and Promoth Manghat, their associates, and two Indian companies, according to the court filing reviewed by Reuters.

Shetty’s allegations extend beyond the disputed guarantees to the bank’s broader relationship with the NMC group and its handling of financial transactions.

According to the filing, Bank of Baroda served as the NMC group’s principal banker until around 2019. Shetty alleges that the lender went beyond routine banking services and facilitated the diversion of funds through group companies and entities presented as independent suppliers.

The allegations include claims that bank officials enabled transactions involving the movement of funds between different entities in ways that obscured their underlying purpose.

Bank of Baroda has rejected the allegations as untested and said it would defend itself in the legal proceedings. The claims remain allegations and will need to be examined through the judicial process.

Allegations over fund transfers and money-laundering alerts

Another significant aspect of the lawsuit concerns the handling of suspicious financial transactions.

Shetty’s filing reportedly alleges that the bank’s systems generated more than 100 money-laundering alerts, which were subsequently closed. He accuses the lender of failing to respond adequately to the warnings and of continuing to extend credit without sufficient security.

The lawsuit also alleges that concerns about borrowings and transactions were not properly disclosed to auditors.

The filing reportedly refers to transactions described as round-tripping, a term used for arrangements in which money moves through multiple entities before returning to its original source. Depending on the circumstances, such transactions can be used to obscure the origin, destination or purpose of funds.

Shetty’s case challenges the bank’s alleged role in processing these transactions and its response to internal warnings.

However, the existence of a suspicious transaction alert does not, by itself, establish that money laundering has occurred. The allegations concerning the alerts, transfers and the conduct of bank officials remain subject to legal scrutiny.

The disclosure of transaction records and internal banking documents could become important in establishing the sequence of events and determining the responsibilities of the parties involved.

NMC Healthcare collapse and its financial fallout

The lawsuit is linked to the wider financial crisis surrounding NMC Healthcare, which entered administration in 2020 after disclosing debts of $6.6 billion, significantly higher than earlier estimates of $2.1 billion, Reuters reported.

NMC had grown into one of the Gulf’s major healthcare groups, operating a substantial network of hospitals and medical facilities. Its collapse triggered investigations, restructuring efforts and disputes involving creditors, former executives and other parties connected with the business.

The scale of the previously undisclosed debt raised questions about the company’s financial reporting, borrowing arrangements and oversight.

For Shetty, the founder of NMC Healthcare and UAE Exchange, the fallout has continued through financial and legal disputes involving the group’s former operations and outstanding obligations.

The latest lawsuit seeks to establish the alleged role of Bank of Baroda and other defendants in the transactions and guarantees at the centre of the dispute.

Bank continues recovery proceedings

Despite the new legal claim, Bank of Baroda has said it will continue recovery proceedings against Shetty for approximately Rs 28 billion in outstanding dues.

The lender’s position contrasts with Shetty’s argument that the guarantees being relied upon are disputed and that the bank’s conduct contributed to the financial problems involving his businesses.

The two sides’ competing claims are likely to make the authenticity of the disputed documents, the handling of transfers and the bank’s compliance procedures key issues in the legal proceedings.

The bank’s statement that it had not yet been served with the lawsuit means the allegations had not been formally tested in court at the time of the reported response.

Legal battle adds to NMC’s continuing fallout

Shetty’s $15 billion claim represents another major legal development arising from the collapse of NMC Healthcare. By seeking disclosure of banking records and challenging the validity of personal guarantees, the lawsuit aims to examine the circumstances surrounding the disputed transactions and repayment demands.

The outcome will depend on the evidence presented, the authenticity of the documents and the court’s assessment of the parties’ respective responsibilities.

For now, the allegations against Bank of Baroda and the other defendants remain unproven, while the lender maintains that it will defend itself and pursue the outstanding dues. The case adds another chapter to the complex financial and legal aftermath of one of the Gulf region’s most significant corporate collapses.