Litigation watch: Bank of Baroda

The most revealing stories about corporate Asia are often told in court. Many of these disputes are slow-moving affairs, spending years tangled in technical arguments and preliminary questions, with the outcome arriving long after the rest of us have moved on.

Still, it is worth keeping tabs on their latest twists and turns. With that in mind, Firefly plans to publish a series of articles focusing on litigation taking place across the region, beginning with a trial kicking off this week involving Indian lender Bank of Baroda.

The cases vary in subject matter and relevance, taking in large corporate collapses, private equity battles, investor-state disputes, enforcement actions, hedge fund fights over valuations and lawsuits involving strategic assets.

Each reflects a different pressure point in the region’s corporate and legal landscape. Some are high-profile while others have received less attention than they deserve, but all provide insight from the courtroom into the forces currently shaping corporate Asia.

When national finance follows the diaspora overseas 

India’s second-largest public sector bank, Bank of Baroda, is locked in a complex, multi-jurisdictional battle involving NMC Health, a UAE-based private healthcare provider which collapsed in 2020 amid US$4 billion in liabilities.

On Monday 23 March 2026, a 16-week trial is scheduled to begin in the Abu Dhabi Global Market courts (ADGM) brought by administrators of NMC Health which will examine the role of banks, executives and advisers in the run-up to its collapse. Bank of Baroda is one of three defendants.

Three features of the case stand out. First is the diaspora-state bank dynamic: a familiar pattern in which an expatriate entrepreneur’s business is backed by state-linked finance, and comes to resemble a quasi-national champion abroad. Reputation and enthusiasm can sometimes create blind spots in scrutiny.

NMC Health was founded by Indian-born businessman Bavaguthu Raghuram Shetty, who also ran UAE Exchange, a major remittance network sending money from the Gulf to India. As one of the most visible India entrepreneurs in the region, Shetty maintained extensive ties with Indian government and financial institutions. He held honorary diplomatic roles, received high-profile civilian awards and was widely portrayed as a prominent philanthropist.

Bank of Baroda had a longstanding India-UAE banking relationship and financed companies within Shetty’s business empire. NMC Health floated on the London Stock Exchange in 2012 and later joined the FTSE 100.

In late 2019, short seller Muddy Waters published a report casting serious doubts on NMC Health’s accounts, triggering intense scrutiny of its finances. An internal review revealed unclosed liabilities of around US$4 billion and by April 2020 the company had entered administration.

Billions hidden in plain sight

The administrators allege fraud on a massive scale by the other two defendants in the action, Shetty and Prasanth Manghat, who served as CEO of NMC Health from 2017 until its 2020 collapse. Bank of Baroda stands accused of acting fraudulently and negligently, in breach of its contractual and tortious obligations. The overall value of the claims is estimated to be at least US$5 billion.

Bank of Baroda was not the only Indian lender exposed. In separate actions, it is suing Shetty and NMC Health to recover around US$250m. Several other Indian banks have pursued claims linked to NMC, including ICICI Bank, which in February 2025 obtained a judgment against Shetty for US$106.29m.

Where Bank of Baroda differs is in its role. While other lenders were largely credit providers, it also acted as a transaction bank—processing payments, handling trade finance and managing account flows—giving it access to internal records. Even if liability is not ultimately established (a high bar, requiring proof that the bank knew or should have known of the fraud, or was sufficiently involved in the relevant transactions), it remains a critical repository of evidence.

The most significant question in the case, however, is likely to be who knew about the hidden debt, and when. At its core lies a central mystery: how more than US$4 billion in liabilities remained concealed, and whether the trial can finally map the mechanics of how they were kept off the books.

Indian state banks often back prominent diaspora entrepreneurs as a way of extending commercial influence and supporting cross-border flows. But that support can come at a cost. The case will test Bank of Baroda’s lending mechanics, how it responded to red flags, and whether it became entangled in financing structures that masked the liabilities.

Echoes of the past

It appears that the Indian diaspora overseas is something of an Achilles heel for Bank of Baroda, an otherwise solid and profitable player listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE). The bank faced a similar scandal in the past.

In late 2017 the lender became entangled in the Gupta family scandal in South Africa. Brothers Ajay, Atul and Rajesh Gupta built a large business empire in the country but became notorious for their close relationship with former president Jacob Zuma. Allegations of state capture triggered a major political controversy and led to asset seizures and sanctions against the family.

Bank of Baroda was accused of allowing Gupta funds to move through accounts despite red flags and in 2017 decided to exit the country. The parallels with NMC Health are striking: in both cases, the lender became deeply involved with powerful diaspora business networks and later faced scrutiny when those networks collapsed or were exposed. The pattern is difficult to dismiss as coincidence.

Last time, the damage was largely reputational. This time, the stakes are significantly higher: it involves direct lending exposure, potential civil liability, and scrutiny of the bank’s internal records in complex litigation.

Across borders and rulebooks

The second feature of interest is the multi-jurisdictional nature of the dispute: clients, capital and oversight spanned several jurisdictions. An Indian businessman with domestic banks eager to lend, a company operating across the UAE, and a listing in London.

The case highlights the risks of a highly fragmented, multi-jurisdictional structure with regulatory oversight split across rulebooks and legal systems, while debt and transactions were dispersed among numerous subsidiaries, limiting visibility into the group’s true financial position.

The case itself has prompted litigation in Abu Dhabi, Dubai and London, underscoring how cross-border structures can both obscure risk and complicate enforcement once a crisis unfolds.

The race to hear global cases 

The third feature is related to the second: the use of Abu Dhabi as a venue for the insolvency litigation. ADGM is a financial “free zone” in Abu Dhabi set up in 2015 that operates under an English common law framework, with its own independent courts and regulatory system designed to handle complex international commercial and financial disputes.

The NMC Health case will be one of its largest corporate trials and a stress test of its young but ambitious financial court system. ADGM’s slick, user-friendly platform, including live-streamed hearings, signals something bigger: courts are beginning to compete for cases in a way once reserved for arbitration. Alongside the Dubai International Financial Centre, it is positioning itself as a global disputes hub. If that competition forces other jurisdictions to raise their game, it should be applauded.

jmoir@fireflyreads.com

Copyright: Ninepin Ltd, 2026