Bank of Baroda Shares Fall 3% After NMC Healthcare Founder B.R. Shetty Files $15 Billion Lawsuit

Shares of state-run lender Bank of Baroda declined by up to 3% in trading on Wednesday, October 14, following reports that Bavaguthu Raghuram (B.R.) Shetty, the founder of NMC Healthcare and UAE Exchange, has approached the Bombay High Court seeking $15 billion (over ₹1.25 lakh crore) in damages.

The legal challenge triggered swift selling pressure across domestic trading desks as market participants weighed the reputational and financial implications of the enormous claim against the public sector bank.

Breakdown of the $15 Billion Lawsuit

Shetty’s lawsuit names 26 defendants, comprising Bank of Baroda, 10 of its current and former officers, former senior executives of NMC Healthcare and UAE Exchange—including Prasanth Manghat and Promoth Manghat—along with their associates and two Indian corporate entities, Avitis Super Speciality Hospitals Pvt. Ltd and SMARD Building Solutions Pvt. Ltd.

The compensation sought in the plaint includes:

• Direct Damages: $5 billion against the defendants jointly and severally for alleged fraud, negligence, and diversion of funds.
• Consequential Losses: $5 billion jointly and severally for lost business opportunities and commercial disruption.
• Reputational Harm: $5 billion sought solely from Bank of Baroda for loss of goodwill, aggravated by actions such as the issuance of a lookout circular against Shetty.
• Interest Claims: Annual interest at the rate of 18% on the primary $10 billion claim.

In his petition, Shetty alleges that Bank of Baroda officials actively colluded with former executives to route funds through unauthorized accounts, ignored over 100 anti-money laundering red flags, and processed transactions based on forged signatures and instructions. He contends that he relinquished executive control of the group companies years before the collapse and was improperly held liable on personal guarantees that bore forged signatures.

Bank of Baroda Responds via Exchange Filing

In response to news reports surrounding the legal action, Bank of Baroda submitted a clarification to the stock exchanges (BSE and NSE) on October 14, asserting that it had not been formally served with the court papers.

The bank stated:

"The Bank has not been served with such a suit and cannot comment on the contents of pleadings which are untested in court. If and when the Bank is served, the Bank will defend the suit firmly and take all steps necessary to protect its interests."

The dispute comes in the wake of an earlier resolution in July, when Bank of Baroda agreed to pay $600 million (approximately ₹5,700 crore) to the court-appointed administrators of insolvent NMC Healthcare and its affiliates in the UAE to settle improper transaction allegations without formal admissions of liability.

Impact on Indian Investors and Banking Sector Outlook

Market analysts tracking public sector lenders noted that while the sheer scale of the $15 billion claim is unlikely to translate into an immediate balance sheet provision, untested high-profile cross-border litigation introduces headline volatility. For Indian institutional and retail investors, Bank of Baroda remains one of the largest state-owned banks, and unresolved claims regarding historical corporate governance, overseas lending operations, and guarantor enforcement continue to draw heightened market sensitivity.

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