Abu Dhabi Commercial Bank PJSC Vs Prasanth Manghat (Abu Dhabi Global Market Court of First Instance)
NMC Fraud: ADGM Court Holds BR Shetty and Manghat Liable; US$5.397 Billion Forms Starting Point for Contributions Five
Summary: The Abu Dhabi Global Market (ADGM) Court of First Instance, in a judgment delivered by Justice Sir Andrew Smith on 5 November 2026, decided connected claims arising out of the extensive fraud affecting the NMC Group. The proceedings comprised Abu Dhabi Commercial Bank PJSC’s (ADCB) action against former NMC executive Prasanth Manghat, and claims advanced by NMC Healthcare Limited, NMC Holding Limited and their joint administrators against Dr Bavaguthu Raghuram Shetty and Manghat. The Court found both defendants knowingly involved in the fraudulent business activities and upheld the administrator claimants’ insolvency and civil causes of action. Its operative conclusions appear at paragraphs 876–878, but the consequential orders and final monetary contributions remain for a further hearing.
The factual context involved a large and sustained fraudulent scheme during the period 2 April 2012 to 9 April 2020. The Court examined misappropriations from NMC companies, concealment of substantial borrowings and securities, sham supplier arrangements, related-party dealings, and the preparation or use of misleading financial information. NMC Health plc entered English administration on 9 April 2020. NMC Healthcare Limited, NMC Holding Limited and other ADGM companies entered administration on 27 September 2020. The complex restructuring, assignment of claims and deeds of company arrangement formed part of the Court’s consideration of standing, applicable law and recoverable loss.
The evidentiary record extended over financial records, banking facilities, accounting expert reports, witnesses’ testimony, contemporaneous documents and WhatsApp exchanges. The Court assessed the reliability of the witnesses and rejected explanations advanced by both defendants to dissociate themselves from the fraud. It treated the overall evidence as proving a sophisticated and coordinated scheme, rather than isolated bookkeeping mistakes or transactions that could be explained merely by administrative deficiencies. Evidence of the defendants’ respective roles and their knowledge was considered separately, despite their competing attempts to attribute primary responsibility to each other.
As to Dr Shetty, the Court rejected his contention that he was unaware of the relevant dealings and had merely been deceived by Manghat and other senior management. It investigated direct and indirect payments for his benefit, transactions involving aircraft and other assets, undisclosed borrowing and securities, sham suppliers and related-party arrangements. Although Shetty was not personally concerned with every operational act, the Court held that the evidence established sufficient knowledge of, and participation in, the fraudulent course of business. A failure to understand or supervise every accounting detail did not negate the dishonest involvement demonstrated by the specific transactions.
Regarding Manghat, the Court scrutinised his senior executive role, financial and treasury responsibilities, relevant qualifications and the benefits or payments passing to him. It rejected his attempt to portray himself simply as a subordinate carrying out directions or as insufficiently financially sophisticated to appreciate the scheme. His involvement in arranging payments, concealing liabilities and securities, facilitating misleading accounting presentations and dealings with auditors supported a finding of knowing and dishonest participation. The extent of a particular defendant’s personal enrichment was not treated as a cap on liability for his role in the wider fraudulent conduct.
For insolvency liability, the Court applied sections 251 and 252 of the ADGM Insolvency Regulations 2022. It held that the criteria for fraudulent trading were fulfilled, including fraudulent conduct of the company’s business, knowing participation and dishonesty. It also found the statutory basis for wrongful trading established: the defendants knew or ought to have concluded that there was no reasonable prospect of the companies being and remaining able to pay debts as they fell due, subject to the prescribed statutory framework. The Court decided that the contribution should be ordered on the fraudulent-trading basis, without requiring a separate cumulative award for wrongful trading. For readers of Indian insolvency law, the subject is broadly comparable to—but legally distinct from—the framework for fraudulent and wrongful trading under section 66 of the Indian IBC and the different statutory ingredients considered in Indian decisions. The UAE/ADGM statutory tests, not the Indian provision, governed this judgment.
The Court determined that Shetty and Manghat were liable to contribute to the assets of NMC Healthcare Limited on the footing of knowing participation in fraudulent trading from 30 April 2012 and thereafter during the relevant period. For assessing contributions it adopted US$5.397 billion (US$5,397 million) as the starting point. However, it did not finally order that exact amount against each defendant: it invited further submissions and reserved the individual contribution figures. The Court examined the relationship between the depletion of assets, the overall shortfall and the breadth of discretion in fraudulent-trading contribution orders. The amount was compensatory rather than punitive; the defendants could not necessarily limit contributions by referring to the amount they personally received.
In ADCB’s separate action against Manghat, the Court accepted that false assurances and the concealment of NMC’s financial position had resulted in loss to the bank. Under the applicable UAE Civil Code and commercial companies provisions, ADCB established US$1,022,293,322 in outstanding monies, subject to any adjustment that Manghat might establish, and US$168,988,980 for loss of profit. The Court expressly recognised credits for US$19,521,279 recovered from pledged shares, US$5,292,824 received through the ADGM administration, and US$5,139,620 received in relation to creditor exit instruments. Those credits must be applied in determining the recoverable balance, rather than the gross heads of damages being described as an unqualified final net award.
Applying Article 292 of the UAE Civil Code, the Court held that the unpaid debts and loss of profit were recoverable as a natural result of the harmful acts. However, ADCB’s separate claim concerning costs connected with NMC plc’s administration remained to be determined. The Court considered causation and the nature of recoverable damage under UAE law, distinguishing liability for actionable deception and concealment from the subsequent accounting exercise required to measure the bank’s losses and deduct recoveries already obtained.
The joint administrator claimants also succeeded on civil claims under the UAE Civil Code, particularly Articles 282 and 285, the relevant commercial companies legislation, and the rules on unjust enrichment. The Court found a basis for liability for deliberate participation in the fraud and considered whether serious failures in discharging duties would independently support a non-fraud claim under Article 282. For unjust enrichment, it examined whether benefits had entered a defendant’s patrimony and the link to the corresponding loss suffered by the companies. These civil remedies were additional to, but could not produce duplicate compensation for, the insolvency contribution claims.
The administrator claimants’ expert evidence put unlawful payments at approximately US$1,587 million to US$1,589 million. The Court accepted entitlement in principle to damages for such payments but requested further submissions on the difference between the expert figures and whether adjustments were required in light of its detailed factual findings. A separate pleaded claim of US$278.7 million for advisory and professional fees and disbursements—including approximately US$109.5 million in legal fees and disbursements—also remained for further examination. Thus, liability and entitlement in principle should be distinguished from the final amount recoverable under each head.
Bank of Baroda had initially been named among the defendants in the administrator proceedings, but the claimants settled with the bank during the trial and discontinued their claims against it. The Court nevertheless reserved consideration of certain claims and counterclaims involving Shetty, Baroda and the other defendants. It emphasised that any damages on the civil claims must take proper account of contributions on the insolvency claims to prevent double recovery. The findings do not establish that separate awards for every pleaded cause of action can simply be added together.
In its concluding directions, the Court declared that ADCB succeeded against Manghat and that the NMC claimants and their administrators succeeded against both Shetty and Manghat on the insolvency and civil claims. A further hearing will address the final contributions, outstanding adjustments, interest, costs, disputed professional expenses and the precise consequential orders. The judgment is significant for its treatment of dishonest participation in a large corporate fraud, managerial responsibility, recoverable credit losses, fraudulent and wrongful trading, unjust enrichment and the protection against overlapping recoveries. It is a decision applying ADGM and UAE law and should not be treated as a direct interpretation of India’s Insolvency and Bankruptcy Code.
