Bank of Baroda ₹2,800 crore recovery proceedings against UAE-based businessman B.R. Shetty are continuing in India and the UAE, even as the lender faces a fresh legal challenge from the founder of NMC Health.
The public sector bank said on Wednesday that it was pursuing recovery and enforcement proceedings against Shetty for outstanding dues of ₹2,800 crore and had secured several decrees against him.
Shetty has filed a case against the bank in the Bombay High Court, seeking $15 billion in damages over alleged fraud involving group companies. He has accused the lender and several current and former employees of helping facilitate a fraud linked to the collapse of NMC Health.
In a stock exchange filing, Bank of Baroda said it had not been served with the suit and could not comment on untested court pleadings.
“If and when the Bank is served, the Bank will defend the suit firmly and take all steps necessary to protect its interests,” the lender said.
Bank of Baroda cites previous court proceedings
Bank of Baroda said the Karnataka High Court restrained Shetty from dealing with or alienating his assets in 2021.
The lender also stated that, during subsequent proceedings before the National Company Law Tribunal (NCLT), Shetty had claimed he was insolvent and unable to repay the bank’s dues.
According to the bank, Shetty had previously filed a similar suit against it before the Supreme Court of the State of New York. The case was dismissed, the lender said.
The bank added that proceedings concerning allegations of fraud, wrongful trading and fraudulent trading were also underway before the Abu Dhabi Global Market (ADGM) Court. It said judgment had been reserved against Shetty and former NMC Healthcare chief executive Prashant Manghat.
Bank of Baroda further stated that proceedings against it before the ADGM Court had been discontinued following a settlement with the joint administrators of NMC Group.
NMC Health collapsed with disclosed debts of $6.6 billion
NMC Health, which was the Gulf region’s largest private healthcare provider at the time, entered administration in 2020 following months of financial mismanagement.
The healthcare group disclosed debts of $6.6 billion, significantly higher than earlier estimates of $2.1 billion.
Shetty’s current legal action alleges that Bank of Baroda and several of its current and former employees helped facilitate fraud involving group companies. The allegations remain subject to legal proceedings.
Bank of Baroda said it would not face any immediate liability from the damages claim unless a court order required payment or accounting rules required the bank to make a provision for potential damages.
Bank of Baroda shares fall 2.6%
Bank of Baroda shares fell 2.6 per cent to ₹231.40 during intraday trading on Wednesday.
The stock movement came as the lender disclosed its position on the lawsuit and outlined the recovery proceedings it is pursuing against Shetty.
The bank said it would defend itself against the new case while continuing efforts to recover the outstanding dues. The damages claim and the bank’s recovery action remain separate legal matters.
