BoB stock tanks 3.5% as NMC founder Shetty sues bank for $15 bn

Bank of Baroda (BoB) shares fell 3.47% to ₹229.35 on the BSE on Wednesday after reports that B R Shetty, founder of the failed UAE-based NMC Healthcare, had filed a $15-billion damages suit against the bank and 25 others.

In a statement, the bank said it had not been served with any such suit. “If and when it is served, the Bank will defend the suit firmly and take all steps necessary to protect its interests,” it said.

Mr. Shetty, 84, has approached the Bombay High Court, alleging that the defendants acted “as an instrument in the siphoning of funds” that led to the collapse of his business empire. The suit, filed through his constituted attorney Shishir Shetty and represented by MZM Legal, names BoB, 10 current and former bank officers, former NMC executives Prasanth and Promoth Manghat, their family members and associates, and two domestic entities.

The suit seeks $5 billion each in direct and consequential damages jointly and severally against the defendants, besides $5 billion exclusively from BoB for loss of reputation and goodwill, along with 18% annual interest.

According to the plaint, Mr. Shetty relinquished operational control of group companies from 2012. It alleges that a management team led by the Manghat brothers diverted funds through fictitious supplier accounts, manipulated electronic signatures and routed transactions through his personal accounts to implicate him.

The petition alleges that BoB’s Abu Dhabi and Dubai International Financial Centre (DIFC) branches facilitated the transactions through “round-tripping arrangements”, collateral-free credit, suppression of audit records and closure of over 100 anti-money-laundering warnings. It also alleges that bank personnel received expensive gifts.

The plaint further claims that, by early 2019, liability confirmations worth about AED 980 million were concealed from statutory auditors EY, while the bank privately recovered around AED 992 million of its exposure.

Mr. Shetty also cites travel restrictions imposed following legal proceedings initiated by the bank. In February 2024, the Karnataka High Court quashed the Look Out Circular, observing that public sector banks could not use such curbs purely for civil loan recovery.

BoB said it was pursuing recovery of about ₹2,800 crore from Shetty and had obtained decrees against him in the UAE and DIFC Courts. “In those proceedings, Mr. Shetty has asserted that he is insolvent and unable to meet the Bank’s dues,” it said.

The bank added that a similar suit filed by Mr. Shetty in New York was dismissed in July 2024.