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.”
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. U GUYS CANT BE HAPPY BY BLAMING INNOCENT CHILDREN AND THERE PARENTS . UNITED AIRLINES (PILOT) U DID A BIG MISTAKE . GOD WILL TAKE CARE OF WHAT U DID WITH THE INNOCENT FAMILY.
SUMAN,JOHN,XAVIER.. WHAT KIND OF HUMANBEING R U GUYS ?????
NO HUMANITY .
WHAT IF U AND UR FAMILY WERE KICKED OUT ? WOULD U SAY FANTASTIC !(JOHN) WOULD U APPRECIATE WITH UR PILOT'S FINAL DECISION !! (XAVIER)
U R NTHNG BUT SHIT IN UR FACE .
REMEMBER U WONT BE GOOD BY BLAMING INNOCENT PEOPLE .
THINK BEFORE U TALK . BCS ONCE ITS SAID ITS FINISHED .
SUMAN,JOHN,XAVIER . BLOODY PEOPLE U R .
WHAT IF U AND UR FAMILY WERE KICKED OUT OF THE PLANE
WITH OUT SHOWING ANY PITY ON U PEOPLE ..
AND U BLOODY XAVIER IF I FIND U IN ANY PLANE I WILL BE THE FIRST 1 TO KICK UR FACE ... CREEPY PEOPLE .
Guyz take it positively. I mean think of it - we Muslims didn't do anything wrong, they accused us of terrorism, they set up the stage to create fear of Islam and it falls back on its own people - they fear us for nothing..!!
There was another news about the same United Airlines that a Man wanted to do Yoga (?) on flight, and threatened to kill passengers if not allowed.
Dear Muslims, please understand
#YOGA HAS NO TERRORISM ..!
#Not All YOGIs are Terrorists, But All Terrorists are SANGHIS..\
Ouch..that hurts :-P"
# 8 JOHN...
Please Read BIBLE...dear
1 Corinthians 11:5-6
-----------------------------
But every Wife who prays or prophesies with her HEAD UNcovered DISHONORS her HEAD, Since it is the same as if Her HEAD were SHAVEN. For if a Wife will not cover her HEAD, then she should cut HER HAIR SHORT. But since it is DISGRACEFUL for a wife to cut off her hair or shave her head, LET HER COVER HER HEAD.
Dear Ram,
This is called MEDIA mind wash... and U r a victim of it...
Many times cheddis were caught doing the same act which was blamed by the authorities who control the media. Many people like you are fooled to believe what is said in the Media.
When people like U, doesnt think and follow blindly what is said in the MEDIA .... it shows how your thinking lies..
Dear Suman,
Don't be afraid of MUSLIM, but afraid of GOD(ALLAH)...who created you & me..
Dear So called RAM ........if your RAM would live ...he would cruch united Airlines company in Bin...its people like you who follow Trum with saffron Trumpet..................who polluted RAM's name
We Muslims expect this ... cos the World all over are ignorant of the TRUTH and the GOD that created us and all.
The only thing they believe is what is said in the media...
Dear Mankind ...
ALLAH says in QURAN that he is the LORD of the heavens and the EArth which U are living...
QURAN : READ it, verify it and REsEARCH it...
When U believe the MEDIA why cant U look at what Our CREATOR says in the QURAN...JUST LOOK and try to understand what YOUr and my CREATOR says to US.
Believe only after U read it.. We are not asking you to believe just like what MEDIA does to U guys which forces U to believe what is said in IT.
ALLAH says mankind is the intelligent CREATION of his creation... It will be PROVED when we look WHO is our LORD... it is better to look once to QURAN rather than stay like animals without looking what our CREATOR says.
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