Shares of the state-owned Bank of Baroda (BoB) declined by 3.47 percent, reaching ₹229.35 on the BSE exchange on Wednesday. The drop occurred after B R Shetty, founder of NMC Healthcare, filed a $15 billion lawsuit against the public lender and 25 other defendants in the Bombay High Court.
In the suit, Shetty alleges allegations of fund diversion, concealment of liabilities, and forgery of personal guarantees. BoB stated that it had not received notice of the lawsuit and intends to vigorously defend its interests, emphasizing that all allegations made have not yet been proven in court.
The bank also noted that similar allegations were considered in the Abu Dhabi Global Market (ADGM) court, where a ruling was issued against Shetty and former NMC CEO Prasanth Manghat regarding fraud, illegal, and fraudulent trading. However, the proceedings against BoB were suspended following the settlement of the dispute with the joint administrators of NMC Group.
BoB reported that it is pursuing recovery and enforcement procedures against Shetty in both India and the UAE concerning outstanding debts of approximately ₹2,800 crore, and has already obtained several court orders against him. Furthermore, in 2021, the Karnataka High Court prohibited Shetty from disposing of or alienating his assets. Later, during proceedings before the Tribunal of Companies, Shetty claimed to be in a state of insolvency and unable to repay the bank's debts, according to BoB.
The bank also mentioned that a similar lawsuit filed by Shetty in the New York State Supreme Court was dismissed in July 2024. BoB confirmed that it will continue to implement its legal strategy to protect its interests.
Shetty demanded $5 billion from the defendants jointly and severally for direct and indirect damages, plus another $5 billion from BoB for alleged reputational damage and loss of business reputation. He also requested an annual interest rate of 18 percent.
The lawsuit includes 10 current and former employees of BoB, as well as former executives of NMC and UAE Exchange/Finablr Prasanth and Promoth Manghat, their spouses, and other related parties. Two Indian companies—Avitis Super Speciality Hospitals and SMARD Building Solutions—are also named in the suit, which Shetty claims own assets acquired through diverted funds.
Allegations against BoB include ignoring anti-money laundering warnings, providing loans without adequate collateral, facilitating transactions through supplier accounts allegedly used for rounding, and concealing credit risk from auditors. It is also alleged that some bank employees accepted gifts and failed to react to warning signs despite internal checks. These allegations have not been proven in court.
In July, BoB agreed to pay $600 million, equivalent to approximately ₹5,700 crore, to settle litigation initiated by NMC Health structures and their joint administrators regarding the collapse of the healthcare group. This agreement resolved claims against the bank without the bank admitting any liability or wrongdoing.
NMC Health, once the largest private healthcare provider in the Gulf, entered administration in 2020 after multi-billion previously undisclosed debts came to light, triggering cross-border litigation involving its founder, former executives, and creditors.