NEWS
Bank of Baroda pays $600 mn to settle court cases with NMC Health
Bank of Baroda reaches an out-of-court settlement with NMC group and its administrators in Abu Dhabi and London.
Bank of Baroda reaches an out-of-court settlement with NMC group and its administrators in Abu Dhabi and London.
Bank of Baroda has coughed out $600 million (around Rs 5,700 crore) in an out-of-court settlement to resolve litigation with the NMC group and its administrators in Abu Dhabi and London.
The bank’s Abu Dhabi branch made the payment under an agreement reached with the joint administrators of UAE-based NMC Health PLC, NMC Healthcare Ltd and NMC Holding Ltd.
In a regulatory filing, the said-owned lender said the settlement resolves all claims between the parties without any admission of liability or wrongdoing by the bank.
The parties involved include the NMC-linked companies, their joint administrators and the bank.
The other terms of the agreement remain confidential, the bank said.
The NMC’s insolvency and civil proceedings took place in the Abu Dhabi Global Market (ADGM) Court of First Instance and the High Court of Justice of England & Wales. While the Abu Dhabi proceedings had commenced trial against NMC Health and its group of companies on 23 March, the English proceedings were stayed to await the outcome of the case in the UAE capital.
The ADGM trial named NMC founder Dr BR Shetty, former CEO Prasanth Manghat and Bank of Baroda as defendants.
In the court, the administrators alleged that Bank of Baroda facilitated fictitious financing arrangements, processing credit based on fabricated invoices to help management conceal NMC's true debt position.
Following the settlement, the proceedings before the Abu Dhabi court have been discontinued, while the English proceedings are in the process of being withdrawn.
The bank said the out-of-court settlement was aimed at bringing the disputes to an end and avoiding prolonged litigation, the uncertainty and costs associated with it.
NMC Health, listed on the London Stock Exchange, ran into trouble after short seller Muddy Waters alleged in a report in December 2019 that the company had inflated assets and undisclosed related party transactions. Investigation by administrators revealed total debt of $6.6 billion against a paltry $2.1 billion disclosed in audited financial statements.
