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.”
Comments
LOL...kuchbee, he is the biggest shit of india..GOD is pure, mercfull & good, this man try to show off that he is with hindus, becarful my dear hindu brother he may change his mind based on the situation. like this people are called marons of 21st century.
words cannot express for this man s. statement , he was dreaming in the daylight
Sita came to his dream and she might have told that Rama is fedup of the Jungle life now he need one place to settle down and to have good rest in his rest of the life.
About Shias all are have one openion that shias not considered as Muslims they are another part of Kuffars.
Why this guy is playing with the sentiments of Hindu Brothers, Although i am a Muslim but we should respect other religions too and their sentiments. When More then 100 crores of our hindu brother and sisters pray him and he is so powerfull then why lord Ram will come in his dreams. May be time or place is not perfect for him to stay on that perticular place. if lord Ram would wish he can accept prayers of crores of peoples and settle the matter.
cant expect worse than this from a bhakt.
chacha....fear Allah before its too late
First of all, does the God cry. If he is crying he can not be God.
The one and only true God will never come in dream and will not cry.
The real God is never be seen NOR imaginable to anyone.
This is the attribution of Ture God.
Let us say for the sake of argument, he has dreamed. It does not mean it is credible dream.
The dreams are 2types True dream and fake Shaytani dream.
About this man who is controversial already in the past, has always been trying to get the mercy of Hindus. He wants to be closure with them.
He is selling his Islamic values of true belief for worldly gains. He is Munafiq
God knows how Shiyas have selected him to be their head of waqf board.
This is the true picture of Shiyas. No basic knowledge of Thoheed/ Oneness.
May God guide them.
I think this is the chamatkar of desi brand. If you start drinking foreign brand before going to bed Lord Jesus also may visit you soon!
Please give a bit more explanation about the divine-human encounter. Rama was alone or Sita was also there with him? Did he go soon after expressing his sadness before you or he also had food with you before leaving?
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