Feb 19: Bavaguthu Raghuram Shetty was once a typical billionaire with a taste for the high-life.
He splurged on a private jet, vintage cars and two entire floors of the Burj Khalifa, the world’s tallest skyscraper. His website shows him hobnobbing with politicians, Bill Gates and Bollywood royalty.
“The thrill of speed and freedom makes me love cars,” Shetty, 77, told local reporters last year.
Shetty had more than enough money -- at least on paper -- to afford such a lifestyle from companies he helped found, including hospital operator NMC Health Plc and financial services firm Finablr Plc. On Dec. 10, his stakes in the public companies were valued at $2.4 billion, making up the bulk of a fortune spanning education, hospitality and one of the world’s oldest tea companies.
Then, a week later, Carson Block came along.
Block’s investment firm, Muddy Waters, issued a report criticizing NMC’s accounts and disclosing a short position. Since then, Muddy Waters’s scrutiny has snowballed into a troubling scenario for Shetty that sheds light on his complex share arrangements and casts doubts about his net worth. His holdings in Finablr and NMC are worth $885 million, but Shetty’s fortune may now be just a fraction of that, depending on the size of his borrowings.
Filings this month show that Shetty pledged a quarter of his NMC stake against loans with First Abu Dhabi Bank and Zurich-based Falcon Private Bank. Two other shareholders may own half of his reported stake. Another lender -- Al Salam Bank Bahrain -- has already sold some of those shares to enforce security over a loan for Shetty, and NMC said Tuesday that First Abu Dhabi Bank sold another chunk earlier this month.
The situation “seems to have gone beyond some of the issues that Muddy Waters focused on initially,“ said Gavin Launder, a fund manager at Legal & General Investment Management, who owned shares in NMC until October. “The increased scrutiny has unearthed other issues.”
Law firm Herbert Smith Freehills has launched a review of Shetty’s holdings at his request, a spokesperson for the Indian-born businessman said, declining to comment further until the analysis is completed. Shetty resigned Sunday as NMC’s chairman.
In its Dec. 17 report on NMC, Muddy Waters hinted at potential overpayment for assets, inflated cash balances and understated debt. Shares of the United Arab Emirates’ biggest private health-care provider have since plunged 67%, and the firm is now the focus of takeover speculation. The sell-off also spread to Finablr, whose stock has tumbled 64% in that span.
NMC has disputed Muddy Waters’s claims, and the company hired former FBI Director Louis Freeh to conduct an independent review of the short seller’s allegations. Meanwhile, local regulators “are making inquiries with the relevant parties,” a spokesperson for the U.K.’s Financial Conduct Authority said.
Shetty is hardly the only ultra-wealthy person to leverage his assets. Elon Musk has used his shares in Tesla Inc. to obtain personal loans, while Oracle Corp. Chairman Larry Ellison has put up millions of the company’s shares to fund a lavish lifestyle that includes trophy properties, America’s Cup teams and the Indian Wells tennis facility in California.
But such deals can also sour, as demonstrated by Shetty’s lenders selling shares his investment firm pledged. He and his advisers are investigating details of the sales as part of their legal review, according to filings.
To complicate matters, Shetty pledged another batch of NMC stock in 2018 as part of a so-called equity collar arrangement with Goldman Sachs Group Inc. that uses options to limit the impact from share moves. Last month, he also pledged most of his stake in Finablr to refinance a loan from the company’s takeover of foreign-exchange firm Travelex for about $1.2 billion.
BRS Ventures Investment, the UAE-based holding company for most of Shetty’s assets, doesn’t report consolidated financials, preventing a complete analysis of his net worth. His other assets include a catering company, a waste-management firm and pharmaceutical business Neopharma, which four months ago was in the early stages of planning for an initial public offering.
Block, 43, earned his reputation as a short seller a decade ago through targeting U.S.-listed Chinese companies that he claimed were frauds. More recently, his San Francisco-based firm focused on British litigation-finance firm Burford Capital Ltd. and Japanese biotech stock PeptiDream Inc. Short sellers seek to benefit from a decline in a company’s share price.
Shetty founded NMC in 1975 after moving to Abu Dhabi from his native India. He created Finablr two years ago to consolidate his financial brands before listing it on the London Stock Exchange in 2019.
Block said he didn’t anticipate NMC’s shareholding drama.
“I wouldn’t have been able to predict that we’d get these bizarre disclosures about unclear share ownership coming out of the company,” he said in a Feb. 13 phone interview. “This has been obviously a more dramatic unraveling than we usually see.”
The proposal prepared by Vidya Bharati Akhil Bharatiya Shikshan Sansthan, the education wing of the RSS and submitted to the Human and Resource Development Ministry, also points out that co-education will have to be discontinued if working hours of schools are extended.
Comments
Bachelors club want to create rule for families.... First get married then U can follow this rules... and then dont stop modi to reunite his wife... U cheddis have ruined his family life...
It is RSS suggetion.. it means MAD
Learing sanskrit in schools and colleges....i dont think it is an issue at all....we learned kannada, hindi, english...sanskrit is also one of that kind....interesting...
Well, everyone understand the sanskrit, people read & understand the vedas, githas. May they turn real religion
Who are they to decide education strategy. It seems RSS is the supreme authority of governance than indian government. It shows RSS is the decision maker and indian government is simply implementing.
May Allah save our country.
Not all the suggestions are bad.
Support the idea:
- Banning co-education system.
- Relieving parents from Home works system.
- Learning Languages should be optional.
- Indianization of education is Ok, westernization has ruined the family values.
- Extra-curricular activity is good, to know the interest of children.
- Working parents can have option of having their children for long hours at schools where Hindus can study Sanskrit, Muslim can learn Arabic and Christians can have their preference.
Not supporting the idea:
- 12 hrs. is too much, most of the developed countries they limit the working hours of adults to 8 hrs. only.
- Forcing Sanskrit to all is too much.
Indian culture is good, family value is eroding which is bad for society as a whole. But forcing the ideas seems to be dangerous.
12Hrs, we don't want to tell even our enemy's children
Samskri : Nothing should be imposed. It is the people's choice.
We should see where the world is heading.
English : Now the important language is for this worldly life is English.
Arabic : Arabic is also big plus point for job seekers. 22 Countries have mother toungue as Arabic. This is the 2nd highest spoken language
DEAR FRIENDS ,
WHO COMMENTED ABOVE.. YOU PEOPLE FORGOT TO ASK WHO ARE THEY TO TELL TO GOV WHAT TO DO AND ALL..
WHAT THEY KNOW ABOUT SANSKRIT.. FIRST OF ALL THEY HAVE TO LEARN TO WEAR PROPER DRESS....NOT CHADIIES ...
RSS RSS RSS, in logo ko koi kaam nahin hain kya, indian citizens doesnt need your recommendations for education, go and teach your chaddis what to do and what not to do, hypocrites.
its a fact that children from India are spending 20~30% more time in Schools when compared to US/UK childrens..
For 8 Hours daily school times:
-> already they carry 5~6 kg school bags, this will raise to 8~9 kgs.
-> Children need to take healthy food, who will feed them during such a long period.
-> does all schools in states are eligible to keep the students for 12 hours with all such activities., if you survey our states may be hardly you can find 2~3% schools are fit with all activities...other 98% schools are hard to spend 8 hours.
-> why teachers must work for 12 hours daily (against labor law).
before, making any regulation gossips..pls just look for facts...
THE BACHELOR CLUB now wants to separate the FAMILIES ...
Wa re WA --- A clear Sign to those who think, the cheddis who are against women (Cheddis will never be successful with whatever they play with thier devilish agenda.)
Majority of their leaders arent married, hence any suggestion from them on how to raise children should be neglected!!!
None of the chaddis may know the sanskrit language before pushing others to learn
RSS is terrorising children, 12 hours schooling is too much for small children....and its inhuman....its okay if they go with discontinuing co-education....well and fine and its islamic way of thinking....However, at the end more expenses for developing country like India, will have to build more schools and colleges separately for both....
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