His personal wealth was valued at over Rs 36,000 crore. Two of his companies were listed in the London Stock Exchange. A self-made man who arrived in Abu Dhabi with just eight Dollars in 1972, he today owns two floors in Burj Khalifa, the world’s tallest and among the most expensive residential towers in Dubai. His company operates 200 hospitals in 19 countries including Spain, India and the UAE, and has diversified into pharmaceuticals, catering and finance.
But while Bavaguthu Raghuram Shetty from Udupi, hailed as one of the richest Kannadigas, has had a dream run, the empire collapsed in the last four months. Abu Dhabi has frozen his accounts. The London Stock Exchange has delisted his companies. While the hospitals continue to run, there is uncertainty about the future even as four criminal cases for fraud and money laundering have been lodged against Shetty, who flew back to India in February, and his executives.
In a statement released late in April, Shetty claimed to be innocent. A group of executives in his company, he alleged, had conspired to defraud him and NMC, his flagship company in healthcare. Bank accounts were opened in his name for fraudulent money transfers that he claimed he did not know about. Companies were set up in his name without his knowledge and loans, cheques, personal guarantees were issued and bank transfers made using his forged signature, he now says.
While the investigation is on, he stands accused of hiding and misrepresenting a staggering debt of Rs 50,000 crore. He says he is determined to clear his name. Significantly, the statement refers to Indian Prime Minister Narendra Modi and the royal family of Abu Dhabi for ‘forging a friendship’ and making him a part of it. Clearly, he expects Modi and the Abu Dhabi royal family to come to his rescue.
London’s Financial Times reported last week, “Abu Dhabi Commercial Bank, which is owed almost $1bn by NMC, has launched a criminal complaint against certain members of the group’s former senior management and some shareholders in Abu Dhabi. This week Big Four firm EY was dragged into the scandal after the UK accounting watchdog announced an investigation into its 2018 audit of NMC. Investors, including Norway’s $1tn sovereign wealth fund, US asset manager Capital Group and Hermes Investment, are furious they will probably be left empty-handed in any restructuring, said people familiar with the matter.”
His travails could not have come at a worse time for him. The past few weeks have seen a backlash in the UAE against Islamophobia in India and of Indians. Old tweets and video clips of Vishwa Hindu Parishad leaders spewing venom against Muslims, videos of BJP MPs slighting Islam and Muslims in India, of Indian policemen beating up solitary Muslims have gone viral in the UAE. The Government of India’s request to Twitter to take down the offensive tweets by some of the PM’s followers, including BJP MP Tejashwi Surya, do not seem sufficient to quell the rage.
But Shetty, who had till recently taken care to hide his RSS links, dropped all caution and in the past few years had flaunted his proximity to the Indian PM and RSS chief Mohan Bhagwat.
In recent interviews he disclosed that he had contested on a Jan Sangh ticket for a seat in the Udupi municipality way back in 1968. He also claimed that Narendra Modi might have campaigned for him. After BJP swept to power in 2014, Shetty went all out to persuade the Abu Dhabi royal family to allow the construction of UAE’s only Hindu temple. His proximity to the Indian Prime Minister might have helped and the royal family donated 13 hectares of land for the temple, prayer rooms, auditorium, exhibition halls, food court and the parking lot to a Trust of the Swaminarayan sect.
The fate of the temple, the foundation stone of which was laid by the Indian Prime Minister last year and which is expected to be completed in 2022, hangs in balance following the pandemic, the strains caused by Islamophobia and BR Shetty’s financial scandals.
I trust every word spoken by Dr Shetty,” said the Indian Prime Minister at a closed-door meeting with businessmen of Indian origin in Abu Dhabi in October, 2019. Shetty, who claims to be a Pharmacy graduate, has covered the walls in his office with all the honours, including an honorary doctorate, that have been conferred on him. But interviewers have noted that his Pharmacy degree is conspicuous by its absence.
In the closed-door meeting, however, he was in his elements. In his somewhat broken English, he told PM Modi that his Group would make an investment of US$5 billion in ‘New India’. It would be his modest contribution to achieve the PM’s vision of a US$5-trillion economy, he added, prompting the PM to say he trusted Shetty.
Shetty, flying high at this point despite a whistleblower having raised a red flag on his accounts, promised to set up super speciality hospitals in tier 2 and tier 3 cities and invest in education, agro-processing and tourism in Jammu & Kashmir. The businessman, who had once boasted that he would produce the costliest film in Bollywood at an investment of Rs 1,000 crore, also offered to set up a film city in Kashmir.
“It [J&K] is a very scenic place, and I’m going to have a film city there, so that people can come and shoot films there, and for tourism,” he said in an interview with Arabian Business. “I’ve already got land offers from Jammu and Kashmir and Ladakh, about 3,000 acres.” The PM had earlier introduced Shetty at a global investors’ meet in Varanasi in glowing terms. When he was called upon to speak, Shetty reciprocated in kind. It was Narendra Modi, he declared, who had made Indians like him proud. Earlier, he would go around with folded hands and bowed his head for investment and help—and he demonstrated how he did that; but now, he declared to a round of applause, he could go around with his head held high.
A bashful, embarrassed smile played on the Prime Minister’s lips on the front row as Shetty went for an overkill. He could do anything for Modi Ji, he declared. If Modi Ji wanted him to fetch a tiger’s milk, he would do that too. Shetty did get into a contract with Varanasi’s Kabir Chaura Math to build a super speciality hospital on land donated by the Math in the PM’s constituency. Once again, the project, if not abandoned, may well get delayed while the NMC promoter, an energetic 77 year old, tries to set his house in order.
The day after NMC’s CFO Suresh Krishnamoorthy, his wife, three children and a housemaid boarded an Air-India flight at Dubai on May 7, newspapers in UAE speculated on how he was allowed to leave UAE. Krishnamoorthy had been reinstated as the Chief Finance Officer (CFO) of the NMC Health Group in February. And though he himself had not been named in any complaint, it was unusual, reports said, that he could leave with his entire family in the midst of the ongoing investigation.
Others speculated that while Krishnamoorthy had been replaced as the CFO in 2017, he could be afraid that investigations would dig into the past when he was in charge of finances. Could he have submitted a false affidavit to the Indian Embassy to secure as many as six seats in the first flight under the ‘Vande Bharat Mission’ to India? Did the embassy play a role in lending a helping hand? Friendly sections of the UAE media reported that Krishnamoorthy’s father was indeed ill and that he would return once normal flights resumed.
Meanwhile, what remains to be unravelled is whether and if some of the Rs 50,000 crore of undisclosed debt was siphoned off to India, and if yes, to whom and put to what use. Was Shetty a political donor? Did he buy electoral bonds? And to what extent has he dabbled in the political life and culture of Karnataka, if not the rest of the country?
One is also left marvelling at PM Modi’s remarkable ability to draw dubious businessmen into his inner circle. First it was Vijay Mallya, who had won a Rajya Sabha seat with the help of the BJP, to fly out of the country after calling on the then Union Finance Minister Arun Jaitley. Then the PM took Nirav Modi to Davos and addressed Mehul Choksi publicly as ‘Mehul Bhai’ before both of them absconded. While Nirav Modi awaits deportation from England, Choksi has become a citizen of Antigua.
The difference is that Shetty is in India and is wanted in Abu Dhabi. It remains to be seen if the PM pulls the strings to bail him out.
Reflections of a friend
Syed Qamar Hasan has worked and lived in the Arab Gulf for over three decades. He was the Abu Dhabi Bureau Chief for Gulf News, Khaleej Times and Emirates Today. He has personally known most leading Indian businessmen in UAE and says BR Shetty has been a “personal friend” for over 25 years.
While the rise and fall of the businessman has led to fascinating accounts in international media, some of the vignettes shared by Mr Hasan in a long piece he wrote on his friend, provide more insights. Here is a compilation from his writing:
· The UAE authorities sealed all his businesses, offices, and bank accounts and those of his family members. The Forbes listed billionaire has lost his empire in a matter a few months. But he is not turned into a pauper. According to reports the man has a lot more stashed away safely in real estate in India and Europe. And as one UAE senior banker told this writer, “all NRI Indian businessmen play safe laying their financial burdens at our doors.”
· Despite the riches he earned and had at his disposal he was never a womanizer or fast track operator squandering money in night clubs and casinos. Luck, hard work, dedication, humbleness, and humility were his success mantras.
· He always found himself in the right place right time. During the first Gulf War B.R’s Foodland a five-star eatery and catering company won a deal to supply food packets to the US and allied soldiers stationed in Kuwait and the region earning millions of dollars in cash.” We would be stuffing the dollar bills in gunny bags, as all payments were made in cash,” he once told me.
· During the period of 35 years that I knew the man, I never saw him angry, cursing, swearing and shouting at his staff or others. He had always that wide smile and hands folded, a slight bend of the head towards the right or left.
· His one weakness was media and like his peers, BR would never miss an opportunity to see himself either in word or spectacle. Ironically the man is now all over the global press but unfortunately for the wrong reasons. BR did not deserve such an egregious exit. He was more a victim of a rat race and nobody wins a rat race.
· The 75 years old Shetty hardly plays any sport. He holds a high ranking position in the Abu Dhabi Cricket Control Board. And one time in early 2006 Shetty had floated the idea of holding Sheikh Zayed Gold Cup Cricket tourney and had got a lot of publicity done for it in the local and home press in India and Pakistan, but BCCI Chairman Sarad Pawar threw a spanner and the tourney was called off upsetting the youngsters in the ruling family, which also was a benchmark in Shetty’s downward journey. Had the tourney got off it would have become a money earning machine for years.