Quinn Emanuel Wins Judgment in $5 Billion Fraud Claim Against NMC Health’s Founder and Former CEO
Quinn Emanuel won a $5 billion fraud judgment for the administrators of NMC Health against NMC’s founder and former CEO, following a $600 million settlement in July with one of the other defendants, Bank of Baroda.
On November 5 in the Abu Dhabi Global Market (ADGM) Courts, Justice Sir Andrew Smith found Dr B.R. Shetty, the company’s founder, and Prasanth Manghat, its former CEO, liable for wrongful and fraudulent trading as well as UAE law civil claims. We act for NMC’s Joint Administrators, Richard Fleming and Benjamin Cairns of Alvarez & Marsal.
After a 15-week trial in which both defendants gave evidence, the court held that the starting point for assessing what they must pay is more than $5 billion, excluding interest and costs.
July’s Bank of Baroda settlement resolved related ADGM and London proceedings and was paid without admission of liability or wrongdoing.
Billions in Undisclosed Debt
NMC Health was the UAE’s largest private health care provider. Founded by Dr Shetty, it listed in London and became a FTSE 100 company. It entered administration in 2020, after billions of dollars of previously undisclosed debt came to light.
The court found that, over a prolonged period, money was misappropriated from NMC and substantial borrowing was concealed.
The court found that both men acted dishonestly. It held that Dr Shetty knew it was improper to treat NMC’s funds as available for his own use. Mr Manghat argued that he was subordinate to Dr Shetty and other powerful shareholders. The court did not accept that, finding that he knowingly took part in carrying out the misappropriations and in running the fraud that disguised them.
The trial began in late March, and was conducted via videoconference due to the security situation in Abu Dhabi.
Alvarez & Marsal went on to rescue NMC in a $2.25 billion restructuring, on which we advised. This judgment, like the Bank of Baroda settlement, is part of the administrators’ effort to recover value for NMC’s creditors.
The result reflects the work of the whole Quinn Emanuel team. It was led by Nick Marsh, Chair of the Civil Fraud Practice in London, and Khaled Khatoun, Co-Chair of the Middle East and North Africa Practice, with Matthew Tse, Rebecca Coyle, and Alex Bromwich.
They were joined by Bankim Thanki KC, Henry King KC, Robin Lööf, Alexandra Whelan, and Damien Bruneau of Fountain Court Chambers, Jerome Squires of 7KBW, and UAE Counsel Ali Al Hashimi of Global Advocates and Ali Al Aidarous of Al Aidarous Advocates and Legal Consultants.
The judgment is available here.