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
Look at the Khazi,
I remember back in mid 2000 he was based in BC road or Bantwal somewhere....
MAY ALLAH GUIDE HIM TO THE RIGHT PATH OF ISLAM
Racing to narga.
Race to narga.
Foolish people.
Tussle for power and Money!
These Khazis and Thangals must focus on other issues of the community instead of wasting time in such stupid subjects, Dargha means business nothing else.
@Sini Mol.
It is permitted to enter women into masjid in Islam. In gulf countries there is a separate place devided in the masjid for women to pray. It is common in all the public places that provides women a separate place, like bus seat or in the a
when will Muslims abandon darga which has no place in Islam ?
Haha Fooolish People.. Let the wrath of Allah be on the Grave Worshipers who is not ready to accept the truth.
Allah Messenger (SAWS) you will indeed follow the way sof those you, hand span by hand span, and an arms length after another. Even if they enter the lizards hole,you will follow them. We (the sahaba) asked is it the jews and christians? He replyed who else!.
One more thing
Enklena boka niklena dever de difference ijji. Enkelna dever kulder...Niklena dever Jaider - Unknown
Please ponder!!
@Sini Mol,
For your kind information, Islam not at all prohibited women to enter Masjid. I can quote many hadith about this. Some of the Pseudo Muslims in our country opposing this. They are doing opposite what Islam says. E.g. Women are not allowed
Dear
Believers NEVER despairs, They already KNOW the FITNA (trials) of this ERA... and Most of the MUSLIMS never understand such FITNA unless they FIRMLY GRIP their FAITH in ALLAH. (They will never bow or ask with the dead or to get barakah from the GRAVEs)
BELIEVERS SOLELY believe & Depend on ALLAH alone.... ALLAH is enough for them. May ALLAH include us in that Group.
They already know everything is with the permission of ALLAH, They already know cos the Prophet Muhammad pbuh said that a time will come that the BELIEVER will be very FEW but MUSLIMs will be a lot...
This TUSSLE is for the GOOD... Most of the MUSLIMs understood the POWER OF MONEY. They REALISED Who is working for the MOney and who is working for the FAITH.
RESPeCT the Auliyas the way prophet Muhammad pbuh taught us. Not the way which was never seen in the times of the SAHABAS... and the 3 generations... We might fall into SHIRK (Associating partners with ALLAH) . May ALLAH protect us from falling into SHIRK unknowingly...
Alibaba Chalees chor
I heard that Womens are not allowed to enter the Mosque.But i could see ladies Walking around the Mosque in last Picture.Can any one tell me is there any different in this Mosque.
Im a regular follower of Dr.Zakir Naik where he says in his speech that it is permissible for womens to enter the Mosque to pray with Allah. As Prophet pbuh wife's used to go.But in Kerala Women are not allowed.Muslims follow same Quran then why there is two rules in Islam. Please explain.
Shameless creature.....money speaks....
Look at khazi's face he doesn't like to see their face (Elected Peoples) which means he is not satisfied with them
PRESIDENT FOR CENTER OF SHIRK...????? NAOOZUBILLAH.
Any credibility left with khazi Khoora Thangal?
finally its end, congrats to newly elected president do good development to the dargah.
It is very sad to see that our people worshipping the thieves.
Who is this khazi and other leaders in ullal? All these people are mallus. They dividing the people in Mangalore.
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