Scribd Logo
Upload

Welcome to Scribd!

  • The Story of Man From Billionaire To Bust

    Uploaded by

    CHANDAN CHANDU
    16 views3 pages
    Bavaguthu Raghuram Shetty was once a billionaire who owned two floors of the Burj Khalifa and collected luxury cars, but he has since faced financial troubles. An investment firm issued a report questioning the accounts of NMC Health Plc, one of the companies Shetty founded, which caused its stock to plunge over 67%. Further scrutiny revealed that Shetty had pledged much of his stake in companies like NMC Health as collateral for loans, and lenders have begun selling off some of these shares. Shetty has resigned as chairman of NMC Health and launched an investigation into the issues, but the situation has shed light on the complexity of his share arrangements and cast doubt on his actual net worth.

    Original Description:

    Original Title

    Untitled

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Bavaguthu Raghuram Shetty was once a billionaire who owned two floors of the Burj Khalifa and collected luxury cars, but he has since faced financial troubles. An investment firm issued a report questioning the accounts of NMC Health Plc, one of the companies Shetty founded, which caused its stock to plunge over 67%. Further scrutiny revealed that Shetty had pledged much of his stake in companies like NMC Health as collateral for loans, and lenders have begun selling off some of these shares. Shetty has resigned as chairman of NMC Health and launched an investigation into the issues, but the situation has shed light on the complexity of his share arrangements and cast doubt on his actual net worth.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    16 views3 pages

    The Story of Man From Billionaire To Bust

    Uploaded by

    CHANDAN CHANDU
    Bavaguthu Raghuram Shetty was once a billionaire who owned two floors of the Burj Khalifa and collected luxury cars, but he has since faced financial troubles. An investment firm issued a report questioning the accounts of NMC Health Plc, one of the companies Shetty founded, which caused its stock to plunge over 67%. Further scrutiny revealed that Shetty had pledged much of his stake in companies like NMC Health as collateral for loans, and lenders have begun selling off some of these shares. Shetty has resigned as chairman of NMC Health and launched an investigation into the issues, but the situation has shed light on the complexity of his share arrangements and cast doubt on his actual net worth.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 3

    THE STORY OF MAN FROM BILLIONAIRE TO BUST

    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. 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.
    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. 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 that First Abu
    Dhabi Bank sold another.
    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 as NMC’s chairman.
    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 more than 67%, and the firm is now the focus of takeover
    speculation. The sell-off also spread to Finablr (UAE based Indian billionaire BR Shetty's
    Finablr Plc is selling its business to an Israeli UAE consortium for just $1, capping the collapse
    of a business that had a market value of 1.5 billion pounds ($2 billion) merely 12 months ago) 
    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, this has been obviously a more dramatic unraveling than
    we usually see.”

    You might also like