Friday, July 24, 2020
BR Shetty Siphoned-Off Millions from NMC Health to Daughter’s Tottering Businesses
* Leaked confidential documents reveal that the NMC Health subsidiary transferred payments worth millions to daughter Reema Shetty’s failing business
* While these transfers were termed as ‘internal transfers’, accounts for the year ending December 2015, did not include the above-mentioned entities as subsidiaries
* Shetty was the chief executive and executive VC of NMC Health at the time of the proposed payments
In a shocking disclosure on UAE billionaire Dr. BR Shetty whose fortune suffered a blow after his two London-listed companies, hospital chain NMC Health and payments group Finablr, accounting for more than 70% of his net worth, were shrouded in controversies, it has been found that had been pumping millions in his daughter’s struggling business ventures.
Leaked confidential documents reveal that the NMC Health subsidiary transferred two payments of Dh 1m in 2015 to the company behind the 'Just Falafel' chain of restaurants that was established by Dr. Shetty’s daughter Reema and her husband Md. Bitar about a decade earlier.
The very next year, it signed off on five bank transfers totaling Dh 4 million in little more than two months, to another one of her ventures, the UAE based catering and food consultancy company, 'The Foodsters Inc'. This enterprise was set up in 2015 by Reema and her husband after the failure of the global expansion of ‘Just Falafel’.
While these transfers were termed as ‘internal transfers’, accounts for the year ending December 2015, did not include the above-mentioned entities as subsidiaries, nor do they appear among the hospitality interests of BRS Ventures, Shetty’s UAE-based holding company.
Says a forensic accountant, on conditions of anonymity, “The series of proposed payments, approved by NMC raise concerns of potential wrongdoing because they were labelled as internal transfers within the hospital group.”
This exposé amply hints at the fact that Shetty being the chief executive and executive vice chairman of NMC Health at the time of the proposed payments, made payments that were 'unusual' and that the transfers should not have been described as internal movements.
‘’If the group does not own these food companies, then it is not an internal transfer. In the corporate world, it must either be one of three things, for purchasing goods or services, lending money or repaying a debt,” adds the forensic accountant.
While Shetty has been constantly claiming that 'fraudulent transfers' were made that he had no knowledge of, before the company was forced into administration by its largest lender, Abu Dhabi Commercial Bank, these transfers authorised by NMC Health to a company run by a member of his family are raising a big question mark on who was this unidentified person authorizing money transfers from NMC’s account at Bank of Baroda in Abu Dhabi to ‘Just Falafel Holdings Limited’ as well as 'The Foodsters Inc'. The proposed payments are all detailed in transfer request documents sent by NMC Healthcare to the Abu Dhabi branch of the Bank of Baroda.
The former London-listed NMC holding company was forced into administration in April amid claims of fraud, mismanagement and the discovery of undisclosed loans of $4.1 billion (Dh 15bn). Administrators Alvarez & Marsal said last month they were scanning documents and preparing a series of interviews with directors to figure out what could be retrieved for creditors.
The NMC scandal came into the limelight in December last year, when short seller Muddy Waters raised concerns in a report about NMC’s debt, alleging that it was vastly understated. While NMC termed the report ‘false and misleading’, the company’s shares plummeted 64% in the days after the Muddy Waters report was published. In late March, the company admitted to having a debt of $6.6 billion, more than three times the $2.1 billion it reported in June last year.