An Abu Dhabi court has found NMC Healthcare founder B.R. Shetty and former CEO Prasanth Manghat liable for fraudulent and wrongful trading, with $5.4 billion forming the basis for assessing financial contributions
ABU DHABI: The Abu Dhabi Global Market (ADGM) Court of First Instance has found NMC Healthcare founder Dr B.R. Shetty and former chief executive Prasanth Manghat liable for fraudulent and wrongful trading linked to the healthcare group’s collapse in 2020.
In a judgment issued on November 5, Justice Sir Andrew Smith ruled that both men knowingly participated in fraudulent activities between 2012 and 2020. The court identified $5.397 billion (AED 19.82 billion) as the starting point for determining their financial contributions. However, the final amounts remain undecided.
Eight years of financial irregularities
The court found that NMC Group funds were misappropriated while substantial borrowings remained undisclosed. Misleading financial statements concealed the company’s financial position from auditors, lenders and investors.
Shetty was found to have received substantial funds improperly transferred from the group, while Manghat played a leading role in managing financial arrangements that enabled the fraud. Both denied responsibility during proceedings, but the court rejected their defences.
Abu Dhabi Commercial Bank wins separate claim
The ruling also favoured Abu Dhabi Commercial Bank (ADCB), which pursued separate claims against Manghat. The court established his liability for approximately $1.02 billion in outstanding obligations and $169 million in lost profits, subject to adjustments and recoveries already received. A further hearing will determine final payments, interest and legal costs.
Impact to Expect
The judgment represents a significant development in efforts to recover losses following NMC Healthcare’s collapse. It also highlights the importance of corporate governance, financial transparency and accountability within major UAE businesses.
The forthcoming proceedings will determine the financial obligations of the former executives and clarify the implications for creditors seeking compensation. NMC Healthcare, established in Abu Dhabi in 1975, entered administration in 2020 after investigations uncovered billions in undisclosed debt. The company subsequently underwent restructuring, allowing several group entities to emerge from administration.
