Home / Business and Economy / Bank of Baroda Pays $600M in NMC Health Scandal
Bank of Baroda Pays $600M in NMC Health Scandal
3 Jul
Summary
- Bank of Baroda to pay $600 million to settle NMC Health claims.
- Allegations include negligence, improper due diligence, and fraud.
- Payout significantly exceeds the bank's reported $253 million exposure.
Bank of Baroda has agreed to a $600 million settlement with the joint administrators of the insolvent UAE-based NMC Health Plc and its affiliates. The settlement resolves claims arising from alleged negligence and improper due diligence by the bank, which facilitated transactions without adhering to anti-money laundering and KYC norms. This significant payout substantially surpasses the bank's previously reported exposure of $253 million when NMC Health became insolvent in 2020.
The administrator, Alvarez & Marsal, accused Bank of Baroda of gross negligence, processing known fraudulent payments, and failing to conduct due diligence on "sham" suppliers. These actions allegedly allowed for payments via fake invoices. The bank chose to settle rather than prolong the legal proceedings, which involved accusations of being in cohort with NMC's promoters and officials. The fraud, discovered between 2012 and 2020, led to substantial losses for stakeholders.
Legal proceedings were initiated against Dr. BR Shetty, former CEO Prashant Manghat, and Bank of Baroda in the Abu Dhabi Global Market (ADGM) court and the England & Wales High Court. While the bank denies all allegations and maintains a robust defense, the settlement reflects the view that transactions were routed through its accounts, constituting an 'Act of negligence' or 'collusion.' NMC Health was declared insolvent in 2020 after hiding over $4 billion in debt.
