“In my judgment, Dr Shetty was dishonest”: the Abu Dhabi Global Market (ADGM) Court has held NMC founder BR Shetty and former CEO Prasanth Manghat liable for fraudulent trading at NMC Healthcare, fixing US$ 5,397 million as the starting point for the contributions they must make to the collapsed group’s assets.
Abu Dhabi: Delivering a judgment of over 200 pages on November 5, the Court of First Instance of the Abu Dhabi Global Market Courts found that Indian-origin businessman Bavaguthu Raghuram Shetty, who founded NMC in Abu Dhabi in 1975, and the group’s former Chief Executive Officer Prasanth Manghat knowingly took part in carrying on NMC Healthcare’s business fraudulently from April 30, 2012, shortly after the group’s London listing [Abu Dhabi Commercial Bank PJSC v. Prasanth Manghat; NMC Healthcare Limited (in administration) & Ors v. Bavaguthu Raghuram Shetty & Ors].
Justice Sir Andrew Smith heard the action brought by NMC Healthcare’s joint administrators together with a separate claim by Abu Dhabi Commercial Bank (ADCB) against Manghat. Bank of Baroda, originally the third defendant, settled with the administrators towards the end of the trial, and the claims against it were discontinued.
The fraudulent trading finding
Applying the ingredients of fraudulent trading under the ADGM Insolvency Regulations 2022, the Court held:
“I have concluded that Dr Shetty and Mr Manghat were both party to the business being carried on fraudulently.”
Both men, it added, acted knowingly, and on Shetty it was blunt: “In my judgment, Dr Shetty was dishonest.” He could not, the Court held, abdicate responsibility for the group’s finances as CEO of NMC plc or afterwards by relying on others. It found it difficult to conceive how he “could realistically have known as little as he claimed” about the group’s affairs and his own bank accounts.
For Manghat, the defence was that, despite his “ostensible job title”, he had no oversight of financial transactions and was “subservient” to Shetty and the principal shareholders. The Court did not accept this:
“This is an unlikely submission from a man who was the CEO of a FTSE 100 company, it is inconsistent with the evidence, and I reject it.”
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What was not in dispute
The Court recorded at the outset that it was not in dispute that the NMC Group was the victim of a “massive and sophisticated fraud” between April 2, 2012 and April 9, 2020. It had two main elements: the misappropriation of the group’s assets and the misrepresentation of its finances in its financial statements. What the parties contested was who was responsible.
The administrators alleged that, between the 2012 IPO and his resignation as a director of NMC plc in February 2020, Shetty received at least AED 4.1 billion from the NMC Group into his personal accounts at Bank of Baroda and other banks. They also alleged that group funds went into an interest in a private aircraft, plots and construction in the Dubai Hills Grove Community, and energy investments including a Wyoming oil field.
As for the accounts, the Court noted that as of December 31, 2018, the group reported debt of about US$ 1,993 million, while unreported debt stood at about US$ 3,888 million. It described a “Sham Supplier” scheme: suppliers raised invoices for goods or services never meant to be supplied, banks financed the invoices, and the money was routed back to the group without being shown as borrowing.
Civil liability and the money
The administrators’ civil claims under Articles 282 and 285 of the UAE Civil Code and the UAE commercial companies laws were also upheld. The Court held that even without the fraud findings, both men would have been liable for grossly failing in their duties as directors. It upheld the unjust enrichment claims against both as well, rejecting the argument that money passing through Shetty‘s accounts without his knowledge would not enrich him, since it found he was “well aware” of the payments.
Quantum remains open. The Court noted that the experts had put the unlawful payments at about US$ 1,587 million to US$ 1,589 million, and invited further submissions on that figure and on a claim of about US$ 278.7 million for advisory and professional fees. ADCB also succeeded in its claim against Manghat.
Bank of Baroda: no finding made
The administrators had alleged that Shetty and Bank of Baroda’s then managing director PS Jayakumar agreed that the NMC Group would repay virtually all its liabilities to the bank in exchange for the bank not revealing the true position of the accounts. The Court called these arguments “persuasive”, but it did not rule on them, as it had not heard the bank’s response after the settlement:
“It would be unfair to Baroda and to Mr Jayakumar personally to make a finding about that, and it is unnecessary to do so in order to deal with the claims before me.”
Next steps in the case
A further hearing will fix the final amounts payable by each man, take up statutory interest and costs, deal with claims by Shetty and Bank of Baroda against the other defendants, and settle the terms of the Court’s orders. The administrators and ADCB have been asked to prepare draft orders. These are the findings of a civil court of first instance and remain open to challenge in accordance with law.
Why the judgment matters
The ruling fixes personal responsibility for the 2020 collapse of NMC Health, once a FTSE 100 company, and puts a figure of about US$ 5.4 billion at the centre of the recovery effort. It also makes clear that founders and chief executives cannot escape liability by claiming they left finances to others or were mere figureheads.
For India, the judgment matters because Shetty is an Indian-origin businessman and Bank of Baroda, a public sector bank, was a defendant until it settled. The Court’s refusal to make findings against the bank leaves its role untested in this proceeding, even as Shetty‘s own US$ 15 billion suit against the bank is pending before the Bombay High Court.
Case Title: Abu Dhabi Commercial Bank PJSC v. Prasanth Manghat [ADGMCFI-2022-111]; In the matter of NMC Healthcare Limited (in administration) [ADGMCFI-2020-020]; NMC Healthcare Limited (in administration) & Ors v. Bavaguthu Raghuram Shetty & Ors [ADGMCFI-2022-299]
Bench: Justice Sir Andrew Smith, Court of First Instance (Commercial and Civil Division), ADGM Courts
Date of Judgment: November 5, 2026
Appearances: Bankim Thanki KC, Henry King KC and team, instructed by Quinn Emanuel Urquhart & Sullivan UK LLP, for NMC Healthcare and its joint administrators; Rajesh Pillai KC and team, instructed by Holman Fenwick Willan LLP, for ADCB; Kajetan Wandowicz for BR Shetty; Patrick Hennessey for Prasanth Manghat; Harish Salve KC, Victoria Windle KC and team for Bank of Baroda
