Barclays launches $130m legal battle against BR Shetty

• Pramod Thomas
• 04 January, 2021

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By: Pramod Thomas

BARCLAYS has launched a $130 million legal battle against Indian-born businessman B R Shetty, the founder of NMC Health and Finablr.

The claim comes after the collapses of the two London-listed companies, which wiped out more than £5 billion of shareholder value, reported The Times.

The lawsuit filed at the Dubai International Financial Centre Courts by the bank alleges that it notified UAE Exchange, a subsidiary of Finablr, in March of its failure to settle the sums that Barclays had paid out that month in a series of foreign exchange transactions.

According to the bank, Shetty had given an unlimited guarantee and indemnity in 2015 in favour of the bank and that it had made a formal demand in April for the money.

The UAE Exchange has been a client of Barclays since 2007. Barclays’ UAE branch extended balance sheet support to the company and provided cash management services to its UK business, the Times report further said.

Barclays joined creditors that supported the appointment of Alvarez & Marsal as the administrator of NMC, the private healthcare business, in April. High court filings at the time claimed that Barclays was owed $146.6 million by NMC.

NMC was stooped into crisis in December 2019 when Muddy Waters, a San Francisco-based short-seller, raised concerns about its accounting and governance. The scandal spread to Finablr, which had listed on the London Stock Exchange in May 2019.

Shetty claimed in April that he was a victim of an alleged fraud and he is resisting Barclays’ application to the court for immediate judgment.

In response to Barclays’ claim, lawyers acting for Shetty wrote to Simmons & Simmons, Barclays’ solicitors, in May,  to ‘establish the fact that Shetty personally signed or authorised another person to sign the guarantee’.

Carlo Fedrigoli, of Onoma FZE, the legal consultancy representing Shetty, has stated that Barclays’ “enormous” losses accrued two weeks after the London Stock Exchange suspended NMC’s shares and a few days before UAE Exchange’s operations were stopped.

According to the report, Shetty claimed that he was not involved in the management of UAE Exchange when the ‘failed’ foreign exchange trades were placed and is ‘not aware of the $130m foreign exchange stock which UAEEX failed to pay for’.