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
They should have sold them to Muslims when they were healthy, at least cow owners could have made some money.....Huge financial loss for poor farmers.....please get ride cow politics from the society....you cannot make vote out of it....it is too late now...let the people eat beef who are interested and enjoy...if BJP are not interested just shut their mouth and keep quite...
Cows in custody of muslims are only mathas rest are........
Viren Kotian, Udupi..... How do you say \ one particular community \" You are totally wrong... Christians, Hindus and Muslims are eating beef....Up date your knowledge...."
@ viren kotian jiiii
if human mother die.. their own son or daughter they will take care about them,
but here u r saying right ur mother is cow , what ur comments here we need that
please take care of ur own mother the
Ha ha...Viren....
Mother's will die even human...but will you leave your mother to be rotten on streets.......as you do... you stop mother GO politics and do something by your own ....did you ever serve a cow or your own mother..?
Dear Viren/Naren,
Do you give your mother better care and try to give best treatment if she is hospitalized or she is sick? If yes. Why not to your mother cow. Don't give unnecessaary comments which divide the communities. Go and save these dying cows. God will give you reward for saving these mothers. Every one die that every one knows. Then why you spend money for hospitalization
If only the holy cow could write an essay on her everyday life in India & voice her concern on people killing & getting killed in her name.
Indian people are treating a human being as an animal on the grounds that he/she ate an animal (cow).
this indian people never change their emotional they even cant allow to eat or live.
this makes more beef trade. lets have some fun.
It clearly shows that nobody can change the cruelty of the animals, let leave everything to the almighty, lets allow ghost eat the feast everyday,,.
Beef ban and ban on cow slaughter is the most idiotic law. It is sure the cows will have a slow death of starvation and thirst.
these groups if they are really interested in truly breeding sacred animal , then why 30 cows perish in a day ??? its all just for politics only! even the labors of the shed not paid for months?? india today has exposed these \gau rakshas\" politics !!!"
Achedin for cow vigilantes but bad day for cows and other civilized people. The expense of the cows should be inquired by Supreme court monitored SIT!
the whole population there must be living in fear & may not be coming out of their houses as the chaddi baniyan gang from the cow vigilante brigade must be wanting to thrash the daylight out of these residents?May be sec.144 should be in place or may be security forces be sent.Another problem is the traditional professionals who skin dead cows may also be scared of the above brigade as they also will be thrashed.That leaves govt.in a dilemma what to do, really pitiable situation in this sleepy state?May be FDI should be welcome from foreign countries,who could help us clean this problem?God save us!
Not only cows, human mother also will die. No one is permanent in this world. stop this politics. Here nobody ate mother's flesh unlike the members of one particular community.
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