Bank of Baroda pays $600 million to administrators of NMC Health in an out-of-court settlement

Mumbai: Public lender Bank of Baroda (BoB) has agreed to an out of court settlement of $600 million (about ₹5,700 crore), settling two parallel litigations by the administrators of NMC Health in the UAE and UK. The payout, made through the bank’s Abu Dhabi branch, closes a cross border fraud where the UK-listed company raised funds from the international markets using forged invoices and inflated assets.

The fraud unraveled after short seller Muddy Waters published a report in December 2019 which showed how the company raised funds fraudulently. A subsequent investigation by the administrators revealed that the company had a total debt of $6.6 billion against just $1.2 billion in disclosed audited financial statements.

NMC Health’s administrators alleged that BoB had processed credit for the company based on fabricated invoices to help the management conceal its true debt position.Without admitting any liability for the fraud, BoB has settled the years long case that had become increasingly complex due to the cross border nature of the fraud, with parallel investigations being conducted in the UK and the UAE. 

Founded by India-born BR Shetty, NMC Health rapidly expanded across the UAE and abroad through a series of acquisitions, even being added to the FTSE 100 index in 2017. At its peak, the company was valued at about £8.6 billion. 

With this settlement, the proceedings before the Abu Dhabi Global Market (ADGM) courts are now discontinued, resolving all claims, causes of action, and related matters null and void between Bank of Baroda and NMC Health PLC and its related companies NMC Healthcare Ltd, NMC Holding Ltd.