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What is the story about?
Shares of state-run lender Bank of Baroda Ltd. fell up to 3% on Wednesday, October 14, after NMC Healthcare founder Bavaguthu Raghuram Shetty (BR Shetty henceforth), approached the Bombay High Court, seeking $15 billion in damages from the lender and 25 other defendants.
Shetty, in his lawsuit, said that Bank of Baroda officers facilitated the alleged diversion of funds from his group companies, ignored alerts of money laundering, and also accepted forged personal guarantees.
In an official statement, Bank of Baroda said that the bank has not been served with such a suit and therefore, cannot comment on the contents of the pleadings, which are untested in court.
Bank of Baroda highlighted that as and when it is served with the lawsuit, they will defend it firmly and take all steps necessary to protect its interests.
"The matters described in the media reports are also the subject of proceedings before the Abu Dhabi Global Market Court, where judgment is reserved against Dr. Shetty and Mr. Prashant Manghat for fraud, wrongful trading, and fraudulent trading," the Bank of Baroda statement said, adding that it cannot comment on the nature of the allegations against Dr. Shetty as the matter is subjudice.
Bank of Baroda's statement goes on to highlight that they themselves are pursuing recovery and enforcement proceedings in India and the UAE against Dr. Shetty for outstanding dues to the tune of nearly ₹2,800 crore and has also obtained several decrees against him.
"The High Court of Karnataka has also restrained Dr. Shetty from dealing with or alienating any of his assets in 2021. In subsequent proceedings before the National Company Law Tribunal, Dr. Shetty has asserted that he is insolvent and unable to meet the Bank’s dues," the Bank of Baroda statement stated.
Shetty had earlier filed a lawsuit against the lender in the Supreme Court of New York, which was dismissed in July 2024. Allegations made were similar to the current ones.
Shares of Bank of Baroda are now trading 3% lower on Wednesday at ₹231.4. The stock is down 23% so far this year.
Shetty, in his lawsuit, said that Bank of Baroda officers facilitated the alleged diversion of funds from his group companies, ignored alerts of money laundering, and also accepted forged personal guarantees.
In an official statement, Bank of Baroda said that the bank has not been served with such a suit and therefore, cannot comment on the contents of the pleadings, which are untested in court.
Bank of Baroda highlighted that as and when it is served with the lawsuit, they will defend it firmly and take all steps necessary to protect its interests.
"The matters described in the media reports are also the subject of proceedings before the Abu Dhabi Global Market Court, where judgment is reserved against Dr. Shetty and Mr. Prashant Manghat for fraud, wrongful trading, and fraudulent trading," the Bank of Baroda statement said, adding that it cannot comment on the nature of the allegations against Dr. Shetty as the matter is subjudice.
Bank of Baroda's statement goes on to highlight that they themselves are pursuing recovery and enforcement proceedings in India and the UAE against Dr. Shetty for outstanding dues to the tune of nearly ₹2,800 crore and has also obtained several decrees against him.
"The High Court of Karnataka has also restrained Dr. Shetty from dealing with or alienating any of his assets in 2021. In subsequent proceedings before the National Company Law Tribunal, Dr. Shetty has asserted that he is insolvent and unable to meet the Bank’s dues," the Bank of Baroda statement stated.
Shetty had earlier filed a lawsuit against the lender in the Supreme Court of New York, which was dismissed in July 2024. Allegations made were similar to the current ones.
Shares of Bank of Baroda are now trading 3% lower on Wednesday at ₹231.4. The stock is down 23% so far this year.
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