FILE Ready Complaint Without Nexgen(8348340.2)

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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------------------------------------------ DR. BAVAGUTHU RAGHURAM SHETTY, and NEOPHARMA LLC, Plaintiffs, -against- BANK OF BARODA, CREDIT EUROPE BANK N.V., ERNST & YOUNG GLOBAL LIMITED, ERNST & YOUNG EMEIA LIMITED, PRASANTH MANGHAT, PROMOTH MANGHAT, SURESH KUMAR VADAKKE KOOTALA, and SURESH KUMAR NANDIRAJU, Defendants. ------------------------------------------------------------------------

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Index No.: Date Purchased: SUMMONS

To the above-named Defendant(s):

YOU ARE HEREBY SUMMONED and required to serve upon Plaintiffs’ attorney an

answer to the Complaint in this action within twenty (20) days after the service of this summons,

exclusive of the day of service, or within thirty (30) days after service is complete if this summons

is not personally delivered to you within the State of New York. In case of your failure to answer,

judgment will be taken against you by default for the relief demanded in the Complaint.

The venue was designated pursuant to CPLR 503 because defendant Bank of Baroda

maintains a place of business in New York County.

Dated: New York, New York MEISTER SEELIG & FEIN LLP July 16, 2021 By: /s/ Alexander D. Pencu Alexander D. Pencu Benjamin D. Bianco 125 Park Avenue, 7th Floor New York, NY 10017 Tel: (212) 655-3500 Email: [email protected] [email protected] Attorneys for Plaintiffs

FILED: NEW YORK COUNTY CLERK 07/16/2021 01:38 PM INDEX NO. 654399/2021

NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 07/16/2021

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TO: Bank of Baroda 1 Park Avenue New York, NY 10016 Credit Europe Bank N.V. Karspeldreef 6A 1101 CJ Amsterdam The Netherlands Ernst & Young Global Limited 6 More London Place London, SE1 2DA Ernst & Young EMEIA Limited 6 More London Place London, England SE1 2DA Prasanth Manghat Flat No. 401, Blue Lagoon Apts. 682020, Water Land Rd, Chilavannoor, Ernakulam, Kerala 682020, India Promoth Manghat Flat No. 401, Blue Lagoon Apts. 682020, Water Land Rd, Chilavannoor, Ernakulam, Kerala 682020, India Suresh Kumar Vadakke Kootala Vaisakom House 51/2222 Kadavanthra Ernakulam, DT Kerala, India Suresh Kumar Nandiraju Plot No. 77 H No 48-65 Papayya Yadav Nagar Besides IDPL Colony Balanagar, Hyderabad 500037, India



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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------------------------------------------ DR. BAVAGUTHU RAGHURAM SHETTY, and NEOPHARMA LLC, Plaintiffs, -against- BANK OF BARODA, CREDIT EUROPE BANK N.V., ERNST & YOUNG GLOBAL LIMITED, ERNST & YOUNG EMEIA LIMITED, PRASANTH MANGHAT, PROMOTH MANGHAT, SURESH KUMAR VADAKKE KOOTALA, and SURESH KUMAR NANDIRAJU, Defendants. ------------------------------------------------------------------------

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Index No.: COMPLAINT

Plaintiffs, Dr. Bavaguthu Raghuram Shetty (“Dr. Shetty”) and Neopharma LLC

(“Neopharma” with Dr. Shetty, “Plaintiffs”), by and through their undersigned counsel, for their

Complaint against Bank of Baroda (“Baroda”), Credit Europe Bank N.V. (“CEB”), Ernst &

Young Global Limited (“EYGL”), Ernst & Young EMEIA Limited (“EYME” with EYGL,

“EY”), Prasanth Manghat (“Pra. Manghat”), Promoth Manghat (“Pro. Manghat,” with Pra.

Manghat, the “Manghat Brothers”), Suresh Kumar Vadakke Kootala (“Kumar”), and Suresh

Kumar Nandiraju (“Nandiraju”) (Pra. Manghat, Pro. Manghat, Kumar, and Nandiraju, the

“Individual Defendants,” with Baroda, CEB, and EY, the “Defendants”), upon actual knowledge

as to their own affairs and upon information and belief as to all other matters, state as follows:

INTRODUCTION

1. This action is brought by two victims of Defendants’ massive financial fraud

surrounding NMC Health Plc (“NMC”) and its related entities (collectively, the “Group

Companies”). The Group Companies, including NMC were all founded by Plaintiff Dr. Shetty.

Despite relinquishing to the Individual Defendants day-to-day management responsibilities over



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the Group Companies, Dr. Shetty retained significant ownership interests in each of the Group

Companies.

2. NMC was formerly the largest provider of private health and well-being services

in the Middle East. Until March 2020, NMC was a listed public company on the London Stock

Exchange (“LSE”) and the LSE’s coveted FTSE 100 Index. NMC is traded on the Over-the-

Counter (“OTC”) market in the United States.

3. As a result of the Defendants’ conspiracy and fraudulent conduct, NMC is now

delisted and in administration (i.e., bankruptcy) in England. The shareholders of NMC and the

other Group Companies have been wiped out in an amount yet to be determined but estimated to

be in excess of $10 billion. Losses to American shareholders of NMC alone stand at approximately

$2 billion.

4. The Defendants conspired for six years to artificially inflate the financials of NMC

and the Group Companies through the use of fraudulent related-party roundtripping transactions

between the Group Companies and NMC.

5. The Group Companies that Defendants used to perpetuate their fraud were: (i)

NMC, the owner of over two hundred (200) healthcare facilities in seventeen (17) countries; (ii)

Neopharma, a pharmaceutical manufacturer; (iii) Nexgen Pharma FZ-LLC (“Nexgen”), also a

pharmaceutical manufacturer; (iv) the UAE Exchange Centre, a monetary exchange entity with

over two hundred (200) branches in the Middle East; (v) Finablr Plc, the holding company of the

UAE Exchange Centre that currently trades on the LSE (“Finablr”); and Guide General

Contracting & Maintenance, a maintenance service provider primarily to the Group Companies

(“Guide”).



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6. At all times relevant to the claims in this lawsuit, the Individual Defendants had

control over Neopharma and Nexgen. Therefore, any actions taken by Neopharma or Nexgen

referenced herein were at the specific direction of the Individual Defendants and were not

independent actions of Neopharma or Nexgen, nor were such actions performed at the direction of

Neopharma or Nexgen shareholders, including Dr. Shetty.

7. Many of the Group Companies, including Neopharma and Nexgen, supplied

medical and pharmaceutical products to NMC. The Group Companies, including NMC, were run

on a day-to-day basis by the Individual Defendants at all relevant times. The Manghat Brothers

along with their co-conspirators at NMC and the Group Companies, including Co-Defendants

Kumar and Nandiraju, conspired to create fictitious invoices for products and supplies purportedly

sold by Group Companies to NMC in order to generate inflated sales and revenue figures for

NMC’s financial statements and ultimately to artificially prop up NMC’s share price.

8. A substantial number of the roundtripping transactions involving significant

amounts of money were U.S. dollar-denominated transactions that cleared through New York

banks. The object of the roundtripping conspiracy was to defraud Plaintiffs and lenders by giving

the appearance that business at NMC and the other Group Companies was booming so that the

Individual Defendants could then procure sizable off-balance sheet loans for NMC and the other

Group Companies. Like any Ponzi scheme, the proceeds of these off-balance sheet loans were

used to fraudulently portray healthy corporate revenue and assets (such as inventory on hand) so

that the Individual Defendants could obtain larger loans to pay off the earlier loans and perpetuate

the Ponzi scheme going forward.

9. As the Ponzi scheme continued and became bigger, Defendants siphoned off

proceeds from these undisclosed and fraudulently obtained loans and disbursed the stolen funds



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amongst themselves. In total, Defendants stole more than $5 billion between December 2013 and

December 2019.

10. On December 17, 2019, the fraud was exposed when an investigative market

research firm, Muddy Waters Research LLC (“Muddy Waters”), released a report questioning the

integrity of NMC’s audited financials. NMC’s stock collapsed. On April 8, 2020, NMC was

placed in administration and two (2) partners from global consultancy firm Alvarez & Marsal

(“A&M”) were appointed joint-administrators for NMC.

11. Following the Muddy Waters report, Dr. Shetty performed his own investigation

into the accounting irregularities at NMC and the other Group Companies by inspecting and

forensically examining the books and records at Neopharma, the only Group Company to which

Dr. Shetty and his investigators gained full access. Based upon the information retrieved from

Neopharma and its banks, Dr. Shetty and his investigators uncovered Defendants’ massive fraud.

12. Plaintiffs have initiated this action to recover damages against the Defendants

totaling over $8 billion that are unique and personal to them. Dr. Shetty is the founder and was

the second largest shareholder of NMC and the single largest shareholder of all the other Group

Companies at the time of their collapse. Although Dr. Shetty was a significant shareholder of

NMC and of the other relevant Group Companies, he ceased actively managing NMC and the

other Group Companies in late 2012 at the age of seventy (70). At that time, Dr. Shetty turned

over day-to-day control of these companies to the Defendant Manghat Brothers whom he knew

for decades and believed would be prudent stewards of the successful companies he created

beginning in 1975.

13. Unbeknownst to Dr. Shetty, the Manghat Brothers used his sterling reputation and

fortune to further the Defendants’ conspiracy and fraud in a variety of ways, including by forging



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Dr. Shetty’s signatures on purported personal guarantees tied to the off-balance sheet loans

fraudulently procured by the Individual Defendants. The Defendants’ fraud has caused Dr. Shetty

over $7 billion in damages, including from purported guaranty exposure, massive reputational

damage, the loss of his equity in the Group Companies and enormous expenses to defend himself

against enforcement actions on the forged guarantees.

14. Plaintiff Neopharma is a pharmaceutical manufacturer. Dr. Shetty is a substantial

owner of Neopharma and Nexgen. During the relevant time-period, both Neopharma and Nexgen

were controlled by the Individual Defendants who used both companies to perpetuate

roundtripping schemes that were used to inflate the NMC financial statements and those of the

other Group Companies. Simultaneously, the Individual Defendants saddled Neopharma and

Nexgen with debt obligations for loan proceeds fraudulently procured by the Individual

Defendants purportedly on behalf of Neopharma and Nexgen but from which neither company

received a penny or any other financial benefit. Instead, the loan proceeds were misappropriated

by Defendants in furtherance of their fraudulent scheme. The damages caused by Defendants’

actions to Neopharma total over $1.0 billion.

15. Each of the Defendants were well-placed to conceal the fraud and each Defendant

played a critical role in the conspiracy, which enabled the Defendants to carry out the fraud for six

(6) years without detection.

16. The Individual Defendants, for example, were in key positions of decision-making

authority and controlled NMC and the other Group Companies. Pra. Manghat managed and

controlled NMC at all relevant times. At all relevant times, Pro. Manghat, Kumar and Nandiraju

managed and controlled UAE Exchange Centre, Neopharma and Nexgen respectively, which were

the core Group Companies aside from NMC involved in the roundtripping scheme.



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17. The Individual Defendants received assistance from complicit employees in the

finance departments at the Group Companies, including NMC. By enlisting key employees in the

finance departments at the Group Companies and NMC to carry out the roundtripping fraud, the

Individual Defendants were able to direct the fraudulent related party transactions without alerting

the owners of the Group Companies, such as Dr. Shetty, who stood to lose, and did lose, billions

of dollars from Defendants’ fraud.

18. Defendant CEB joined the conspiracy on December 30, 2013, when its senior

executive officers Cenk Atmaca and Aamir Habib (“CEB Executives”) approved the bank to enter

the first credit facility with NMC for $15 million. The CEB/NMC credit facilities were renewed

and increased with regularity throughout the six (6) year conspiracy. CEB was pivotal to the

conspiracy, because CEB was the first bank to approve and process the bogus invoices generated

and disguised by the Individual Defendants under the veneer of medical supply chain invoices

from the Group Companies to NMC.

19. CEB knew that these bogus invoices were illegitimate and were part of a fraudulent

roundtripping scheme to inflate NMC’s and the Group Companies’ financials. Nevertheless, CEB

joined the conspiracy because it was earning a five percent (5%) fee on over $200 million it was

“lending” under its supply chain credit facilities with NMC. Not a single invoice paid by CEB

pursuant to its trade finance credit facilities during the six (6) year conspiracy was legitimate or

tied to an actual product sold by the Group Companies to NMC.

20. In fact, even the most basic review or investigation into the invoices, as CEB was

legally required to undertake pursuant to existing U.S. anti-money laundering laws (“AML”) such



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as the Bank Secrecy Act of 1970,1 would have revealed that the invoices were fraudulent. The

bogus invoices contained fictitious supplier names, product information and contact information

that were implausible on their face and lacked any corroborating or verifiable information.

Nevertheless, CEB processed and paid every single fraudulent invoice in furtherance of the

roundtripping scheme and in direct contravention of the BSA and other existing AML laws.

21. CEB’s complicity in the fraud provided the Individual Defendants with a purported

trade finance track record that substantially assisted the Individual Defendants’ efforts in falsely

projecting to the outside world the meteoric growth at NMC and the other Group Companies and

to justify their purported need for immediate supply chain financing2 to underwrite the explosive

growth. Consequently, CEB enabled the Individual Defendants to scale their roundtripping

activity and solicit new banks and trade finance firms for additional credit facilities and loans.

22. The Individual Defendants ultimately entered into loans and credit facilities with

approximately fifty (50) banks and supply chain finance lenders as of the date of the Muddy Waters

report on December 17, 2019. The bulk of these credit facilities and loans were never recorded on

the companies’ books and records – a fact made possible only because the Group Companies

including NMC used the same auditor – the Defendants’ co-conspirator EY.

23. Baroda joined the conspiracy in late 2013 and was central to the roundtripping and

Defendants’ subsequent theft of the loan proceeds. Baroda already served as NMC’s and the other

1 The Bank Secrecy Act of 1970 (“BSA”) is codified at 12 U.S.C. §§ 1829(b), 1951-1959 and 31 U.S.C. §§ 5311-5314, 5316-5332. Regulations implementing the BSA appear at 31 C.F.R. Chapter X. 2 Supply chain financing or reverse factoring (as it is sometimes called) is a practice by which a company solicits a financial institution to pay the company’s suppliers at a faster rate, in exchange for a discount on the supplier’s invoices to the company. This arrangement allows the suppliers access to immediate cash so they continue supplying to the company. In other words, it is referred to as “supply chain financing” because it attempts to avoid disruption in the supply chain, i.e., attempts to avoid a situation where a supplier is forced to slow or stop production while it awaits payment on its invoices. In legitimate practice, the supplier is paid immediately by the trade financing firm on its invoices to the company, usually at a five percent (5%) discount on the invoice, and then within (typically) 120 days, the company pays the financing firm the full value of the invoice.



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Group Companies’ bank in 2013 and was therefore the principal conduit for the related party

roundtripping transactions executed and processed by Baroda’s United Arab Emirates (“UAE”)

and New York branches in both Emirati Dirham (AED) and U.S. Dollars (USD).3

24. Baroda’s presence in both the UAE (where NMC and the Group Companies

maintained their headquarters) and New York (where many of the trade finance and related-party

transactions were processed) as well as Baroda’s willingness to brazenly clear thousands of

transactions despite the obvious indicia of money laundering made Baroda indispensable to the

conspiracy.

25. For example, the Group Companies, usually starting with NMC, moved massive

amounts of cash among the various related entities, – either on the same day or next day and in the

exact same amounts going out and coming back in, – which is an obvious red flag for suspicious

transaction activity and financial crime. In each of the roundtripping transactions, Baroda was

either the sending bank, receiving bank, and often both.

26. The Manghat Brothers convinced Baroda’s senior UAE and U.S. executives,

including the country heads of the bank, to join the conspiracy by, upon information and belief,

offering and paying them kickbacks from the siphoned funds the Defendants ultimately

misappropriated from the trade finance-based loans and credit facilities that the Individual

Defendants procured over the six (6) year period.

27. The senior UAE and U.S. Baroda bank executives who knowingly participated in

the conspiracy included: D. Anand Kumar (CEO of Baroda’s Dubai Branch); Bhaskaran

Sudershan (Senior Executive Officer, Baroda’s Dubai Branch); Y.K. Gupta (Deputy General

Manager of Baroda’s Abu Dhabi Branch); Jaideep Sharma (Chief Credit Manager, Baroda’s Abu

3 All monetary denominations herein using only “$” refer to USD. Non-USD monetary denominations herein will include a denomination identifier, such as AED before the monetary amount.



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Dhabi Branch); and Ashok Kumar Garg (Baroda’s Chief Executive of U.S. Operations)

(collectively the “Baroda Executives”).

28. In exchange for the kickbacks, the Baroda Executives ensured that Baroda breached

its fiduciary duties owed to the Group Companies and violated existing United States AML laws

by processing thousands of related party transfers without ever filing a single suspicious activity

report (“SAR”) with United States regulators. If Baroda had complied with existing AML laws

and investigated the suspicious transactions, the massive accounting fraud and theft would have

been discovered in its infancy and the Plaintiffs would never have sustained their financial injury.

Instead, based on the records obtained by Dr. Shetty’s representatives in the course of their

investigation into Neopharma alone, at least $2.1 billion in roundtripped transactions were

processed through the Group Companies’ Baroda accounts. Discovery from the Defendants and

the other Group Companies will reveal the total amount of roundtripped funds to be in the multiples

of those moved through Neopharma.

29. The Baroda Executives also facilitated the Individual Defendants in opening new

shadow accounts in the names of the Group Companies but which the Individual Defendants

controlled exclusively. These shadow Baroda accounts received large portions of the off-balance

sheet loans that the Individual Defendants procured purportedly on behalf of the Group Companies

and for which they forged Dr. Shetty’s name as the purported personal guarantor on the loans. The

shadow bank accounts were opened specifically to receive the misappropriated funds that the

Defendants ultimately stole and distributed among themselves and their co-conspirators.

30. Once the loan proceeds were roundtripped among the Group Companies to

perpetuate an artificial perception of revenue, the proceeds were either transferred out from the

Group Companies’ operating accounts to the Defendants directly or the funds were transferred by



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the Individual Defendants to these Baroda shadow accounts controlled by the Individual

Defendants but in the names of the Group Companies as the account holders. From there, the

Individual Defendants transferred the funds to their own bank accounts and shared the siphoned

funds with their conspirators within the Group Companies, Baroda, CEB and EY.

31. The Individual Defendants not only forged Dr. Shetty’s name on the personal

guarantees securing the fraudulently procured loans, but intentionally designed their fraud to make

Dr. Shetty the “fall guy” in the event the Defendants’ scheme was ever uncovered. That is, the

Defendants roundtripped the loan proceeds through and among the Group Companies to falsely

give the impression that these transactions were tied to Dr. Shetty by virtue of his substantial

ownership stake in the Group Companies.

32. None of the Group Companies received or retained the benefit of these funds,

because none of the misappropriated funds remained in the Group Companies’ existing operating

accounts at Baroda. The funds were either transferred out of the Group Companies’ operating

accounts to the Defendants’ personal accounts (or those of their shell entities) or they were

transferred from the Group Companies’ operating accounts into the shadow Baroda accounts and

then subsequently transferred to the Defendants and their co-conspirators.

33. Consequently, Dr. Shetty and two (2) of the companies in which Dr. Shetty was a

substantial owner but was not involved in management or operations, Neopharma and Nexgen,

sustained substantial reputational injury and catastrophic business losses from falsely being

associated with the Defendants’ fraud. Indeed, the Muddy Waters report and subsequent

statements released by A&M publicly reported that the related-party transfers between NMC and

other Group Companies were tied to companies in which Dr. Shetty retained significant ownership

interests such as Neopharma and Nexgen.



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34. EY was a critical co-conspirator in the Defendants’ fraudulent scheme since 2013.

EY actively concealed the existence of the fraud for six (6) years through their relationship and

audit partners Bassam El Hage (EYGL), Victor Veger (EYGL), Andre Kasparian (EYME),

Mohammad Mobin Khan (EYME), Joseph Murphy (EYME), Sameeh Ullah (EYME), Ashraf

Eradhum (EYME) and Hamid Zafar (EYME) (collectively “EY Partners”). Indeed, the Individual

Defendants and EY maintained a deep and cozy relationship, which included EY serving as the

auditor to not only publicly held NMC but also to the privately held Group Companies that were

involved in the roundtripping scheme.

35. By ensuring that EY served as and remained the auditor for NMC and the other

Group Companies, the Individual Defendants were able to prevent the discovery of the accounting

fraud and the Defendants’ theft of the loan proceeds because the same complicit auditor (EY) was

inspecting and purporting to audit the financials of all the companies involved in the fraud.

36. The Defendants’ financial fraud could have easily been discovered if EY or another

auditor had performed an arms-length audit of either NMC or the Group Companies, such as

Neopharma. An arms-length audit at any of the Group Companies would have uncovered the

roundtripping scheme and alerted the board of directors of NMC and the owners of the Group

Companies, like Dr. Shetty, of the pervasive fraud.

37. To be sure, EY’s misconduct was not one of professional negligence, but rather EY

actively and intentionally conspired with the Defendants to conceal their fraudulent conduct. For

example, the accounting fraud generated from the thousands of suspicious roundtripping

transactions in which massive sums of money were transferred between and among NMC and the

related Group Companies on the same days and in exact amounts is manifest from a simple review

of the bank statements belonging to any Group Company involved in the scheme. EY knew the



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Defendants were defrauding Dr. Shetty and laundering illegally obtained loan proceeds, and EY

actively participated by issuing knowingly fraudulent audits and other financial reports to deceive

the victims of the conspiracy, including Dr. Shetty.

38. By way of another example, a simple review of the Neopharma line items in the

company’s general ledgers that showed sizable receivables should have prompted an auditor to

inspect the company’s back-up information to verify the source or origin of the purported

payments. When Dr. Shetty’s investigators performed their own forensic investigation into

Neopharma’s records following the Muddy Waters report on December 17, 2019, they discovered

that none of the questionable transactions were substantiated by an invoice (fake or otherwise) or

any other back-up documentation in Neopharma’s records indicating the source or origin behind

the hundreds of millions of dollars (USD) of “payments” wired into Neopharma’s bank accounts.

39. Neopharma purportedly received revenue and yet the company maintained no

substantiating documentation as to the products or supplies that Neopharma purportedly provided

in exchange for those purported payments made by supply chain finance banks like CEB or by

NMC directly. EY knew the transfers were illegal, but fraudulently approved the financials so it

could also profit from the conspiracy. EY certified that Neopharma’s financials were accurate and

contained no material misstatements, just as EY did with NMC and all the other relevant Group

Companies that were used by the Defendants to carry out their fraudulent scheme.

40. Of course, these “payments” to Neopharma from either a supply chain finance firm

or NMC were immediately transferred out of Neopharma and roundtripped through other Group

Companies before ultimately a portion of those funds were siphoned off and stolen by the

Defendants.



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41. In the course of Dr. Shetty’s investigation into Neopharma’s records (through his

representatives and investigators), Dr. Shetty discovered that the Individual Defendants and EY

conspired together and recorded the roundtripping transactions (i.e., the funds received by

Neopharma that were then transferred back to NMC in the same amount and on the same or next

day) on Neopharma’s financials as repayment obligations to Dr. Shetty for prior “shareholder loan

advances” to the company.

42. EY’s audit partners approved and certified the accounting fiction, absurd on its

face, that approximately 1,400 related-party transfers from Neopharma alone to NMC or another

related Group Company totaling $980 million over the six (6) year period of the conspiracy were

all tied to the reimbursement of loans previously advanced by Dr. Shetty.

43. Dr. Shetty’s investigators uncovered that the EY audit team not only concealed the

fraud but substantially assisted the Individual Defendants to inflate Neopharma’s financials (and

those of the other Group Companies) by advising them on how to inflate earnings figures through

illicit tactics such as roundtripping and channel stuffing and to avoid recording the massive debt

accumulated by the Individual Defendants on the companies’ financial statements.

44. In sum, Defendants were able to design, execute and conceal their fraud because

the Defendants were in exclusive control of the relevant information and decision-making

processes. For example, the Individual Defendants recruited into the conspiracy the handful of

finance employees at each Group Company with authority for maintaining the respective

companies’ books and records and for managing the relationships with the companies’ banks,

lenders and auditors.

45. At the same time, the Individual Defendants enlisted Baroda as a conspirator

without which the fraud could never have occurred because the conspirators needed a complicit



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bank with branches in New York and the UAE that was willing to facilitate and participate in

money laundering. Relatedly, the fraud would have been discovered in its infancy but for EY’s

role as the auditor for NMC and the other Group Companies involved in the fraud.

46. The fraud was not discovered earlier and has caused significant financial injury to

shareholders of NMC and the other Group Companies in the United States and overseas.

47. Plaintiffs’ direct damages are substantial. Prior to NMC’s collapse, Dr Shetty

enjoyed a deserved reputation as a successful businessman and philanthropist who had been

awarded innumerable business and philanthropic accolades for his civic contributions. Until NMC

was placed into administration in England, Dr. Shetty was one of the wealthiest self-made men in

Asia and the Middle East with a net fortune of over $3 billion as of 2019.

48. The Defendants’ fraud has financially devastated Dr. Shetty, Neopharma, of which

Dr. Shetty owns forty-nine percent (49%), and Nexgen, which is owned fifty percent (50%) by

Neopharma. Dr. Shetty has been left with massive equity losses as a shareholder in NMC and the

other Group Companies in the amount of approximately $1.5 billion and personal exposure on

over $4.53 billion in forged personal guarantees tied to the Defendants’ fraudulent Ponzi scheme

loans. Dr. Shetty is currently defending against numerous personal guaranty enforcement actions

initiated by the lenders of the fraudulently procured loans in multiple forums.

49. In addition, Dr. Shetty, Neopharma and Nexgen have sustained debilitating

reputational injuries due to Defendants’ fraud. The reputational harm suffered by the Plaintiffs

have manifested in a near total loss in business from customers for Neopharma and Nexgen and

have resulted in the severe diminution in value of both companies in an amount to be determined

at trial.



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THE PARTIES

50. Dr. Shetty is an individual, a citizen of India, and a resident of Abu Dhabi, UAE.

51. Neopharma is a limited liability company formed under the laws of the UAE, with

its principal offices located at Plot No. A-1, 89-95, Industrial City of Abu Dhabi (ICAD),

Mussafah, Abu Dhabi, UAE. Dr. Shetty owns forty-nine percent (49%) of Neopharma. Nexgen

is fifty percent (50%) owned by Neopharma.

52. Baroda is an Indian multinational banking and financial services company. Baroda

has a banking and financial services branch located at One Park Avenue, New York, New York,

and is registered with the New York State Department of Financial Services. On its website,

Baroda asserts that:

“We are a famous Indian bank in USA, with over a century-long experience in the Indian banking sector. As a pioneer among Indian banks NY, we are leading, because of our top-notch services in various sectors. From offering Funds remittance to India from USA to Online rupee remittance to India from USA, to even offering SWIFT or rapid funds to India from USA, we are experts in this domain. Our services also include issuing demand drafts and other such services via our correspondent banks transfer to India from USA and others.” (Emphasis in original)

53. CEB is a public limited company, established in 1994, in the Netherlands. CEB is

headquartered in Amsterdam, Netherlands.

54. EYGL is an English limited company with a registered company number 04328808

and a registered office address at 6 More London Place, London, SE1 2DA. Along with Deloitte,

KPMG, and PricewaterhouseCoopers, EYGL is considered one of the “Big Four” accounting

firms.

55. EYME is an English limited company with a registered company number 06610829

and a registered office address at 6 More London Place, London, England SE1 2DA.



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56. Pra. Manghat is an individual, a citizen of India, and a resident of Abu Dhabi, UAE.

Pra. Manghat is a Chartered Accountant, was Chief Financial Officer (“CFO”) of NMC from 2009

to 2015, Deputy Chief Executive Officer (“Deputy CEO”) of NMC from 2015 to 2017, and at all

relevant times thereafter was Chief Executive Officer (“CEO”) of NMC. Separately, Pra. Manghat

was also the registered manager for Nexgen and the authorized signatory for Nexgen.

57. Pro. Manghat is an individual, a citizen of India, and a resident of Abu Dhabi, UAE.

Pro. Manghat is a Chartered Accountant, was CEO of UAE Exchange Centre from 2015 to 2019,

and at all times relevant thereafter was CEO of Finablr. Pro. Manghat and Pra. Manghat are

brothers.

58. Kumar is an individual, a citizen of India, and a resident of Abu Dhabi, UAE. At

all times relevant, Kumar was Head of Treasury for NMC, and CFO of Neopharma.

59. Nandiraju is an individual, a citizen of India, and a resident of Abu Dhabi, UAE.

At all times relevant, Nandiraju was Deputy CEO of Neopharma and a Director of Nexgen.

JURISDICTION AND VENUE

60. The Court has jurisdiction over Defendants, pursuant to CPLR § 302(a)(1) and

CPLR § 302(a)(2), because Baroda transacts business within New York and Defendants conspired

with each other to commit tortious acts within the State of New York.

61. Venue is proper in this Court, pursuant to CPLR §§ 503(a) and 503(c), because

defendant Baroda is both authorized to conduct business in the State of New York and Baroda

resides in New York County, having its principal New York State offices in New York County.



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FACTUAL BACKGROUND

(i) Dr. B.R. Shetty

62. Dr. Shetty was born in India in 1942, but has resided in the UAE since 1973. Dr.

Shetty began his career in the healthcare industry and became a pharmacist. He began his

professional career as a distributor for a pharmaceutical company in India.

63. In 1973, Dr. Shetty immigrated to the UAE and started working as the UAE’s first

traveling pharmaceutical representative. This experience made him quickly recognize the

deficiency of basic medical services in the region. Greatly disturbed by the lack of medical care

for those who needed it most, Dr. Shetty set up New Medical Centre, in 1975. At that time, New

Medical Centre was a small pharmacy, dental clinic, and laboratory. With many years of hard

work and dedication by Dr. Shetty, New Medical Centre gradually grew into NMC Healthcare

LLC.

64. In or around 1988, NMC Healthcare LLC launched the first private hospital in Abu

Dhabi, and over the next two decades NMC Healthcare LLC subsequently launched many

additional private hospitals in different regions of the UAE. In April 2012, NMC Healthcare LLC

(now NMC Health Plc, i.e., NMC) became the first healthcare company from the Gulf Cooperation

Council countries4 (and the first company of any type from Abu Dhabi) to be listed on the Premium

Segment of the LSE. NMC was also included in the coveted FTSE 100 Index, an index of the 100

companies listed on the LSE with the largest market capitalization.

65. By 2017, Dr. Shetty’s ambitious vision had become a reality, with NMC now the

largest private healthcare provider in the UAE, maintaining over 200 medical care facilities across

4 Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.



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seventeen (17) countries, 18,000 employees, and 3,000 doctors, treating approximately 8.5 million

patients per year.

66. While building NMC, Dr. Shetty recognized that quality medicine, at a good price,

was integral to any healthcare system. So, in 2003, Dr. Shetty formed plaintiff Neopharma, a state-

of-the-art pharmaceutical manufacturing company, which (until the collapse of NMC and the

Group Companies) was financially sound with manufacturing contracts for multinational

pharmaceutical corporate titans such as Merck, Pfizer, AstraZeneca and Boots UK.

67. In January 2011, Dr. Shetty through his company Neopharma formed Nexgen, a

pharmaceutical manufacturer located in the UAE, in a joint-venture partnership with Hetero Drugs

(a leading pharmaceutical company in India recognized as a world leader in the production of

affordable anti-retroviral drugs). Neopharma owns fifty percent (50%) of Nexgen.

68. In addition, during his early days in Abu Dhabi, Dr. Shetty was one of many

expatriates living in the UAE. In 1980, Dr. Shetty formed UAE Exchange Centre (a money

transmitting business) to offer opportunities for working poor expatriates to send money to their

homes at affordable rates. In 1993, the UAE Exchange Centre became a SWIFT member, and by

2017 it had approximately 800 branches throughout the Middle East.5

69. In line with Dr. Shetty’s desire to serve the public good, the Group Companies

provided for the most critical health needs of the most vulnerable people, i.e., giving access to

hospitals that provided quality healthcare services, affordable (yet highly effective) medicines, and

quality financial solutions to the common person.

70. While NMC, UAE Exchange Centre, and Neopharma were the foundation of this

system, these companies were supported by other Group Companies with robust balance sheets

5 In 2019, Finablr, the holding company of the UAE Exchange Centre, began trading on the LSE.



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and proven operational success. Together, the Group Companies supported and served millions

of people across the Middle East.

71. Over the course of building the NMC business empire, Dr. Shetty never abandoned

his goals of improving the quality of life for the underprivileged. Dr. Shetty frequently provided

money, along with medicine and medical supplies free of charge to many countries, including

India, Bangladesh, Japan, Indonesia, Turkey, Sri Lanka, and Thailand when those countries faced

natural disasters such as earthquakes and tsunamis. In addition, Dr. Shetty contributed generously

to UNESCO’s Education for All (EFA) initiative, through scholarships, aggregating funds for

schools and colleges, as well as through financial promotion of various sporting activities.

72. Dr. Shetty’s philanthropy has been widely recognized, including when Dr. Shetty

received the Abu Dhabi Award (2005), the highest civilian honor in the Emirate of Abu Dhabi. In

2007, Dr. Shetty received the Pravasi Bharatiya Samman Award (PBSA), the highest civilian

honor conferred on overseas Indians. In 2009, Dr. Shetty received the Padma Shri Award,

considered among the highest civilian honors in India. And, in 2016, Dr. Shetty received the

Golden Peacock Award for Lifetime Achievement in Business Leadership, which is widely

considered the highest award an Indian businessperson can earn in the world.

73. By 2015, Dr. Shetty was recognized as one of the wealthiest and most widely

respected businessmen in Asia and the Middle East with a reported net worth of over $3 billion by

Forbes Magazine.

(ii) The Manghat Brothers Assume Control of NMC, then the Group Companies

74. The Manghat Brothers joined the Group Companies in the early-2000s. They are

both Chartered Accountants, the equivalent of a CPA in the United States. From the beginning,

the Manghat Brothers convinced Dr. Shetty that they were competent, industrious and trustworthy



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individuals. And, even more critically, over the course of approximately one decade the Manghat

Brothers convinced Dr. Shetty that they shared his vision for the future of the Group Companies.

75. As Dr. Shetty became older and more focused on his philanthropic initiatives, he

took a less active role in the management of NMC and the other Group Companies and relied

increasingly more on the Manghat Brothers whom he entrusted with greater authority and

responsibilities as time went on.

76. In 2009, Dr. Shetty appointed Pra. Manghat as CFO of NMC, the largest and most

profitable company of the Group Companies. Beginning in 2009, Pra. Manghat was responsible

for all financial and accounting decisions involving NMC and soon thereafter was responsible for

all financial decisions at all the Group Companies as Pra. Manghat replaced senior executives at

the Group Companies like UAE Exchange Centre, Neopharma and later Nexgen with his hand-

picked loyalists like Kumar and Nandiraju who reported to Pra. Manghat and took direction from

him.

77. In 2012, Pra. Manghat was the operational driving force behind taking NMC public

through its initial public offering (“IPO”), which raised 117 million British pounds ($186.9

million). Given his stewardship of NMC and the Group Companies, Pra. Manghat was awarded

“CFO of the Year” by the Institute of Chartered Accountants in England and Wales.

78. By late 2012, Dr. Shetty ceased managing NMC and the other Group Companies

on a day-to-day basis and relied on Pra. Manghat to manage NMC and the other Group Companies.

However, because Dr. Shetty was publicly associated with the Group Companies throughout the

Middle East region, Dr. Shetty agreed to remain the figurehead of the Group Companies for a few

more years.



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79. In June 2014, Pra. Manghat became an executive director of NMC. By 2015, Pra.

Manghat sought and was appointed Deputy CEO of NMC by Dr. Shetty while his brother Pro.

Manghat was appointed CEO of UAE Exchange Centre. In early 2017, Pra. Manghat officially

replaced Dr. Shetty as CEO of NMC.

80. In these roles for NMC, Pra. Manghat asserted effective control over NMC’s

financials since 2009, and over the other Group Companies’ financials and accounting practices

by 2012. In sum, Pra. Manghat maintained unilateral control of what was and was not disclosed

to the NMC Board of Directors (as well as the owners of the Group Companies), including to Dr.

Shetty who remained a Director of NMC until 2020 and remains a significant owner of Neopharma

and, through Neopharma, Nexgen.

81. As explained below, Pra. Manghat was able to provide false and illegally inflated

financials to the NMC Board without the Board having any way to uncover the fraud particularly

because co-conspirator EY falsely certified that it had audited the Group Companies’ financial

statements including those of NMC and disclosed no irregularities from 2013 through 2019.

82. As of 2013, Dr. Shetty’s withdrawal from the day-to-day management of the Group

Companies was so complete that he ceased having access to the Group Companies’ internal

financials. The only financial reports Dr. Shetty received from 2013 until December 17, 2019 (i.e.,

the date of the Muddy Waters report), were those prepared by the Manghat Brothers and their

conspirators at the Group Companies such as Neopharma’s and Nexgen’s Kumar and Nandiraju.

Dr. Shetty also received and relied on the audited financial statements for NMC and the other

Group Companies that were prepared by EY. At no time was Dr. Shetty aware of the Defendants’

conspiracy or fraudulent scheme.



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(iii) The Manghat Brothers’ Co-Conspirators at the Group Companies

83. Defendants Kumar and Nandiraju (along with non-party Prasanth Shenoy) were

close associates of the Manghat Brothers and rose through the ranks together at the Group

Companies. After Pra. Manghat and Pro. Manghat were promoted by Dr. Shetty, the Manghat

Brothers hand-picked Kumar, Nandiraju, and Shenoy for senior positions at the Group Companies

such as Neopharma and Nexgen.

84. The ability to place trusted co-conspirators in key decision-making roles at the

Group Companies, especially those companies that were suppliers to NMC, like Neopharma and

Nexgen, was pivotal for the Manghat Brothers in setting the stage for their roundtripping and

misappropriation schemes.

85. For example, Kumar, was at all times relevant, CFO of Neopharma (while also

remaining the Head of Treasury at NMC), and Nandiraju, was at all times relevant, Deputy CEO

of Neopharma and a Director of Nexgen. In these senior positions at Neopharma and Nexgen,

Kumar and Nandiraju were in positions of authority to conspire with the Manghat Brothers and

effectuate the illicit roundtripping transactions involving NMC, Neopharma and Nexgen and to

conceal their misconduct from being discovered by Neopharma’s owners, including Dr. Shetty.

86. With respect to Neopharma, Kumar and Nandiraju invited Neopharma’s six (6)

senior finance employees into the conspiracy. These six (6) Neopharma finance employees

reported directly to Kumar and had, along with Kumar and Nandiraju, exclusive access to the

company’s books and records. Neopharma’s six senior finance employees were: (i) Biju Kumar;

(ii) Kannan Parayath; (iii) Rahul Rajeev; (iv) Prasoon Kumar; (v) Siby Matthew; and (vi) Vivek

Bhatt (“Neopharma Finance Employees”).



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87. Dr. Shetty’s investigation into Neopharma following the Muddy Waters report

revealed that Kumar and Nandiraju conspired with the Manghat Brothers to inflate the Group

Companies’ financials (including NMC). The purpose behind the fraud was to prop up the NMC

share price but also for the Defendants to steal billions of dollars from the fraudulently procured

loans, which were not recorded on the Group Companies’ financial statements as debt.

88. As part of Dr. Shetty’s investigation, the Neopharma Finance Employees (and other

employees) were interviewed and their statements were reconciled against the company’s records

and bank statements, which revealed a massive fraud coordinated by the Individual Defendants

with knowledge and assistance from the Group Companies’ bank (Baroda) and auditor (EY).

89. Dr. Shetty’s investigation into other Group Companies was thwarted by Baroda and

EY’s refusal to cooperate as well as Dr. Shetty’s inability to gain access to the other Group

Companies’ books and records. However, upon information and belief, and based on

Neopharma’s information, which bears on Nexgen and other Group Companies, the same modus

operandi was employed by the Individual Defendants at the other Group Companies (i.e., in

exchange for kickbacks paid to key finance employees, the Individual Defendants enlisted said

finance employees to effectuate the roundtripping transactions and concealment of same by

fabricating the purpose and nature of the transactions in the companies’ internal financials).

(iv) Dr. Shetty Investigates the Muddy Waters Allegations and Discovers the Fraud

90. The Muddy Waters report, dated December 17, 2019, alleged that NMC was poorly

governed and that the company suffered from insufficient disclosure of related-party transactions,

manipulation of balance sheets, and inflated asset purchases.



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91. Dr. Shetty was shocked at the findings and conclusions contained in the Muddy

Waters report, particularly because he had entrusted the Manghat Brothers, whom he viewed as

honest and competent, to run the Group Companies since late 2012.

92. Dr. Shetty questioned Pra. Manghat about the Muddy Waters report. Pra. Manghat

vehemently denied the report’s allegations, and assured Dr. Shetty that Muddy Waters was merely

a short seller trying to cover its short-investment. Having known Pra. Manghat for almost twenty

(20) years at that point, Dr. Shetty believed him.

93. Shortly thereafter, however, two (2) large shareholders launched a discounted share

sale for their NMC shares, worth GBP £375 million ($500 million) at the time. And, by February

2020, (i) investment firm Kohlberg Kravis Roberts & Co. L.P. (KKR) withdrew its offer to acquire

NMC, (ii) S&P had placed NMC on credit-watch-negative due to the purported governance

deficiencies, and (iii) Moody’s placed NMC’s rating under a review for downgrade.

94. It was at this point in February 2020 that Dr. Shetty suspected the Manghat Brothers

had been lying to him.

95. In March 2020, NMC reported that it had identified billions of dollars (USD) in

credit facilities—including hundreds of millions of dollars (USD) in supply chain financing—that

had not previously been disclosed to or approved by the Board. NMC was quickly delisted from

the LSE and removed from the coveted FTSE 100 Index.

96. On April 9, 2020, NMC was placed into administration (i.e., bankruptcy) in

England. NMC currently remains in administration. Over the course of the following year,

Neopharma, Nexgen, and other Group Companies as well as NMC’s Board of Directors, including

Dr. Shetty himself, have been sued for billions of dollars (USD) in courts across the world

stemming from NMC’s collapse.



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97. Dr. Shetty has also been sued on the purported personal guarantees by the lenders

of the supply chain finance loans and credit facilities even though they were fraudulently procured

by the Individual Defendants without Dr. Shetty’s knowledge, let alone approval. None of the

personal guarantees were signed by Dr. Shetty. Rather, Defendants conspired to forge Dr. Shetty’s

signatures to procure the loans, the proceeds of which the Defendants subsequently

misappropriated amongst themselves. Defendants’ unconscionable fraud has placed Dr. Shetty’s

wealth, reputation and legacy in grave danger and has eviscerated the financial security of his

family that he worked a lifetime to achieve.

98. As explained below, the Individual Defendants were able to fraudulently procure

larger loans by surreptitiously offering Dr. Shetty as the personal guarantor on those loans and

then forging his signatures on the personal guarantees. Between 2016 and 2019, at a time when

Dr. Shetty ceased active management of NMC and the Group Companies and was already deep

into his seventies, the Individual Defendants (unbeknownst to Dr. Shetty) forged his signatures on

at least one hundred twenty-seven (127) personal guarantees tied to loans with personal exposure

totaling approximately $4.53 billion.

99. Beginning in February 2020, Dr. Shetty engaged forensic investigators and legal

advisors to investigate the circumstances surrounding the NMC accounting irregularities and its

impact on NMC and the other Group Companies. Given his cessation of day-to-day management

duties of NMC and the Group Companies since 2012, Dr. Shetty did not have access to NMC’s or

any of the other Group Companies’ books and records or their information networks. Dr. Shetty’s

demands to the Individual Defendants to provide him access to the books and records of the Group

Companies were ignored.



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100. On February 26, 2020, Pra. Manghat was terminated from his position as CEO by

the NMC Board. However, Dr. Shetty’s information requests to A&M for financial information

concerning NMC were also ignored. Between March 2020 and July 2020, the Individual

Defendants resigned their positions at the Group Companies and along with Pra. Manghat fled the

UAE. The Individual Defendants’ current whereabouts are unknown. During this time, a series

of employees in the finance departments of the Group Companies, including Neopharma and

Nexgen, resigned.

101. While Dr. Shetty and his investigators attempted to gain legal access to the Group

Companies’ information networks and financial records, Dr. Shetty’s investigative team sought

from EY its work papers for each of the Group Companies. EY ignored Dr. Shetty’s repeated

requests for information even though he is the largest owner of the Group Companies that were

utilized by the Defendants to perpetuate the fraud and sustained the largest financial injury from

same.

102. Relatedly, Dr. Shetty’s investigative team sought all the bank records, including the

bank statements from all of the banks with whom Dr. Shetty was aware the Group Companies

maintained accounts. All of the banks complied with Dr. Shetty’s information requests with the

exception of Baroda, which ignored all requests from Dr. Shetty’s representatives.

103. In the summer of 2020, Dr. Shetty and his investigators were able to gain full access

to Neopharma’s information network and the company’s books and records. Dr. Shetty’s

investigative team performed a forensic investigation and interviewed Neopharma employees,

including some of the finance employees prior to their resignations. Dr. Shetty’s investigation is

ongoing. However, the pleadings below are based on his investigatory findings to date.



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(v) Overview of the Defendants’ Conspiracy and Fraud

104. The extensive accounting fraud and subsequent misappropriation of over $5

billion of fraudulently procured loans was the result of a coordinated and deliberate conspiracy

involving the Individual Defendants, CEB, Baroda and EY.

105. The conspiracy was grounded on the ability to use roundtripped transactions based

on fake invoices to inflate the financials of NMC and the other Group Companies. The Individual

Defendants could then show lenders and supply chain finance firms (also known as trade finance

firms) the inflated financials indicating that the Group Companies were profitable and in need of

additional supply chain finance loans to underwrite their explosive growth.

106. For the avoidance of doubt, each of the Defendants knew that the transactions were

illicit, based on fake invoicing and that no actual products were being sold by the Group

Companies to NMC. Nevertheless, each of the Defendants went forward with the conspiracy in

exchange for kickbacks paid to their senior executives/partners by the Individual Defendants out

of the stolen loan proceeds, and because CEB, Baroda, and EY earned millions of dollars in

outsized fees for ostensibly providing the Group Companies with trade finance, banking, and audit

services respectively.

107. The roundtripping and corresponding inflation of the Group Companies’ financials,

including those of NMC, would not have been possible without the active participation of each

Defendant and their agreement to act in concert in furtherance of the roundtripping scheme.

108. The Individual Defendants held top management positions at NMC and at the other

Group Companies involved in the roundtripping scheme, such as Neopharma, Nexgen, UAE

Exchange Centre, and Guide. The Individual Defendants fabricated the fake invoices that provided



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the purported justification for the Group Companies to solicit and obtain supply chain financing

from trade finance firms and lenders.

109. The Individual Defendants with the assistance of Baroda established the

infrastructure through which the Defendants would carry out the roundtripping and

misappropriation scheme.

110. Baroda had been the Group Companies’ longstanding bank for over a decade.

However, as the Individual Defendants, especially Pra. Manghat, exerted greater control over the

Group Companies, the Individual Defendants became the “clients” for Baroda and the

relationships between the Baroda Executives and Individual Defendants deepened.

111. The Individual Defendants needed Baroda to join the conspiracy to execute the

roundtripping scheme, because the Individual Defendants needed a pliable bank willing to

participate in the fraud and violate existing AML laws in the process.

112. First, the roundtripping scheme involved substantial supply chain financed

transactions from third-party trade finance firms, which were in U.S. Dollars thereby requiring a

conspirator bank with, at a minimum, U.S. correspondent banking services to clear the

transactions. Over $2 billion of supply chain financed transactions cleared through New York in

furtherance of the Defendants’ conspiracy. Baroda had branches in the UAE and in New York.

Baroda was the ideal bank co-conspirator, because the Group Companies already maintained

existing accounts at Baroda and the bank’s footprint in the UAE and New York enabled the

complicit Baroda Executives in both locations to execute the fraudulent transactions without the

bank’s AML compliance department intervening. Therefore, Baroda’s AML compliance

department did not block the unlawful transactions or report the illicit conduct to law enforcement



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through the filing of suspicious activity reports with the U.S. Treasury Department’s Financial

Crimes Enforcement Network (“FinCEN”) and other U.S. federal agencies.

113. Second, the roundtripping scheme was heavily reliant on supply chain financing,

an industry susceptible to money laundering. U.S. AML laws require banks to scrutinize trade

finance transactions by conducting due diligence on the supply chain invoices submitted for

payment to ensure the invoices are legitimate and not fake invoices utilized in furtherance of a

money laundering scheme.6 As explained below, not a single roundtripping transaction involving

the NMC/Group Companies supply chain financing was legitimate. In fact, the fake invoices were

patently bogus yet Baroda processed all the payments for the fictitious invoices.

114. Indeed, when the Individual Defendants invited CEB into the conspiracy to provide

the initial supply chain financing on the first wave of fake invoices, CEB chose Baroda to be its

correspondent bank for clearing its trade finance payments on the Group Companies’ bogus

invoices, even though CEB had the ability to clear its own U.S. Dollar denominated transactions.

The CEB Executives deliberately selected Baroda to clear its trade finance payments on the bogus

invoices because they were assured by the Individual Defendants and the Baroda Executives that

Baroda could process the payments for the illicit invoices in contravention of U.S. AML laws and

in furtherance of the fraudulent roundtripping conspiracy.

115. Third, the roundtripping scheme required a bank that would be willing to clear

thousands of highly suspicious related-party transactions with all the indicia of money laundering

(i.e., circular movement of funds between related parties in the same amounts and on the same or

next day with the intent to conceal the source and origin of the funds). As shown below, any one

6 Trade finance is among the highest risk industries for money laundering activity and United States bank regulators explicitly direct multi-national banks with a presence in the United States to employ enhanced scrutiny to all trade finance transactions. See The United States Federal Financial Institutions Examination Council’s “Bank Secrecy Act/Money Laundering Examination Manual” (2014 Edition) (“BSA/AML Manual”) at pp. 267-271.



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of the roundtripping transactions in isolation should have been flagged, stopped and investigated

by Baroda’s AML compliance departments because they each exhibited the classic indicators of

money laundering. Instead, Baroda processed thousands of these roundtripping transactions

between the same related companies and in the same suspicious patterns in clear violation of the

most basic AML compliance practices, let alone the compliance standards required by the BSA.

For example, Neopharma alone through its Baroda account was involved in at least 1,400

roundtripping transactions totaling at least $980 million. None of that money remained at

Neopharma. Rather, those funds were roundtripped into another Baroda account maintained by

another Group Company (usually NMC) with a portion used to repay earlier outstanding loans

while the remaining funds were misappropriated by the Defendants.

116. Baroda also assisted the Individual Defendants to establish the vehicles by which

the Defendants misappropriated proceeds from the fraudulently procured loans. The Individual

Defendants secretly opened new shadow bank accounts at Baroda in the names of the Group

Companies, even though the Group Companies already maintained existing operating bank

accounts at Baroda. The purpose of these shadow bank accounts was to receive the siphoned off

loan proceeds from the new trade finance loans and credit facilities the Individual Defendants were

procuring on the purported strength of the inflated Group Companies’ financials.

117. After the loan proceeds were sufficiently roundtripped among the Group

Companies’ operating accounts to provide the perception of revenue activity, a portion of those

funds were either directly transferred out of the operating accounts to the Defendants and their co-

conspirators or the funds were transferred by the Individual Defendants to the shadow Baroda

accounts held in the names of the Group Companies.



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118. Once the siphoned funds were deposited in the shadow Baroda accounts, Individual

Defendants then stole the funds by further wiring the funds to themselves and their co-conspirators

(e.g., the finance employees at the Group Companies and the complicit CEB, Baroda and EY

employees). The shadow bank account statements were not in the custody and control of the Group

Companies because they were not used as the Group Companies’ operating accounts. Rather, the

shadow accounts existed solely for the purpose of stealing the siphoned loan proceeds and to

conceal the scale of the Defendants’ misappropriation.

119. Of course, any independent auditor that genuinely and without corruption inspected

the Group Companies’ operating bank accounts at Baroda would have uncovered the fraud by

observing the transaction history showing the direct flow of funds from the Group Companies’

Baroda operating accounts directly to the Defendants as well as the suspicious transfers from the

Group Companies’ operating accounts to the Group Companies’ Baroda shadow accounts.

120. This made EY a critical contributor to the Defendants’ conspiracy. EY assisted the

Individual Defendants to inflate the Group Companies’ financials and conceal both the

roundtripping scheme and Defendants’ theft of the loan proceeds.

121. Dr. Shetty’s investigation into Neopharma, for example, revealed that the EY

Partners conspired with the Individual Defendants and their co-conspirators in the Neopharma

Finance Department to conceal the company’s blatant roundtripping and channel stuffing

activities, which substantially improved Neopharma’s financial outlook. Channel stuffing is an

improper revenue recognition practice in which a company fraudulently inflates its sales and

earnings by sending excessive amounts of products to its distributors ahead of demand. In

Neopharma’s case, and upon information and belief, for all of the Group Companies, the channel

stuffing was compounded by the fact that no products were ever distributed early but rather the



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channel stuffing was based entirely on fake invoices purporting to sell illusory products from the

Group Companies (like Neopharma) to NMC.

122. Indeed, the EY Partners were provided with the Individual Defendants’ pre-

determined and fake financials for Neopharma months in advance, which EY simply rubber-

stamped in furtherance of the overall conspiracy to inflate the Group Companies’ financials. With

both the internal finance employees at Neopharma and the EY Partners participating in the

conspiracy, nobody but the conspirators had knowledge of the fraud.

123. Upon information and belief, this scheme repeated itself at all the other relevant

Group Companies, including NMC until the release of the Muddy Waters report on December 17,

2019.

(vi) The Mechanics of the Conspiracy and Fraud

124. CEB’s willingness to participate in the fraud provided the Defendants with the

ability to scale their roundtripping fraud using supply chain financing and they proceeded to

procure approximately one hundred seventy-two (172) trade finance loans and credit facilities

between 2014 and the end of 2019. Mechanically, the fraud was carried out as follows: the

Individual Defendants through NMC, solicited a trade finance firm or lender to provide supply

chain financing on NMC’s purported purchases, for example, of Neopharma or Nexgen

pharmaceutical products.

125. NMC then created fictitious Neopharma and Nexgen invoices (purportedly issued

to NMC by Neopharma and Nexgen), which the supply chain finance firm paid (to Neopharma

and Nexgen) on behalf of NMC at a 5% discount.



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126. After the funds were received by Neopharma or Nexgen, the Individual Defendants

directed that the money received from the supply chain financing company be transferred to a

NMC Baroda account.

127. The Individual Defendants attempted to conceal these related-party transfers

between Neopharma and NMC, for example, by adjusting Dr. Shetty’s corresponding shareholder

loan accounts at Neopharma. In other words, the Individual Defendants with the assistance of EY

attempted to conceal the roundtripping scheme between the Group Companies by disguising the

related-party transfers as legitimate repayments of loans purportedly advanced by Dr. Shetty.

128. The use of Dr. Shetty’s shareholder loan account at Neopharma to conceal the

fraudulent supply chain finance activity, however, resulted in thousands of adjustments to Dr.

Shetty’s shareholder loan account held at Neopharma, which far exceeded that of any normal

shareholder loan account. Generally, such accounts experience only one (1) or two (2) transactions

a year, at most.

129. Upon information and belief, the Individual Defendants and EY engaged in the

same tactics (i.e., adjustments to Dr. Shetty’s shareholder loan accounts at other Group

Companies) to conceal the related-party transfers and roundtripping between other Group

Companies.

130. The Individual Defendants and EY intentionally facilitated NMC to avoid

recording the supply chain debt on its books. Instead, the Individual Defendants and EY enabled

NMC to treat the supply chain financing as a short-term account payable. Using this manufactured

(at least on paper) high cash position and low debt, NMC sought more trade finance loans and

credit facilities to perpetuate the Ponzi scheme by fraudulently giving the outward perception that

NMC’s business was booming. In order to procure additional loans, the Individual Defendants



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fraudulently committed Dr. Shetty (without his knowledge or approval) to be the loan guarantor

on the new loans by forging his signatures on the personal guarantees.

131. During the early stages of the fraudulent supply chain scheme, NMC repaid the

supply chain financing lender with that lender’s own money, which it received through Neopharma

or Nexgen. The Individual Defendants made these earlier supply chain financing repayments in

furtherance of their conspiracy so that they could go immediately back to that same financing

lender (or other lenders) and start the process all over again. By 2019, as the scheme was beginning

to be exposed, the Defendants simply misappropriated the supply chain lenders’ cash. Neopharma,

Nexgen, and other Group Companies are already being sued for hundreds of millions of dollars

(USD) for the failure to repay these supply chain finance loans even though none of the Group

Companies retained a penny of those loan proceeds.

132. In sum, the Individual Defendants used Neopharma as a conduit to secure large

volumes of short-term off-the-books loans for NMC and the other Group Companies in order to

maintain the illusion that NMC and the other Group Companies were financially secure and very

well-capitalized.

133. The Individual Defendants used the financing to further advance their fraudulent

scheme by having the Group Companies roundtrip cash through other Group Company suppliers

to purchase assets such as (i) equipment from Guide (only on paper of course), (ii) pharmaceuticals

from Neopharma and Nexgen (through additional fake invoices, without the need to involve supply

chain financing), (iii) other business entities (over which the Individual Defendants could then

inflate the value to manipulate financials), or (iv) real property (over which the Individual

Defendants could likewise inflate the value to manipulate financials).



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134. All of these roundtripped transactions flowed in and out of the Group Companies’

Baroda bank accounts. An examination of the documentation surrounding the initiation of these

related-party transactions and Baroda’s processing of same reveals extremely suspicious

circumstances that should have immediately triggered the attention of Baroda’s AML compliance

departments.

135. Each of the intra-Group Company related-party transfers moved funds within

Baroda (i.e., each Group Company had its own Baroda custodial bank account). Each intra-Group

Company transfer instruction was written on the initiating Group Company’s letterhead. The

transfer instructions, however, were never addressed to a specific banker or relationship manager

at Baroda. Rather, the transfer instructions were directed generically to “Manager” at Baroda even

though the transfer requests were in the millions of dollars at a time and occurred frequently.

136. Furthermore, the Group Company transfer forms from, for example, Neopharma,

were all purportedly authorized by Dr. Shetty but never with a wet signature. Every single transfer

instruction form reviewed by Dr. Shetty’s investigators during their investigation revealed that the

Individual Defendants forged Dr. Shetty’s authorization on the related-party transfer forms by

using one of two (2) versions of Dr. Shetty’s electronic signature. These fraudulent and

electronically signed related-party transfer forms addressed to an unidentified Baroda “Manager”

were delivered, via email, from Pra. Manghat’s executive assistant Sabina DeMello on Pra.

Manghat’s instructions to a generic Baroda email account without further elaboration.

137. After the funds were sufficiently roundtripped among the Group Companies, the

Individual Defendants transferred a portion of the siphoned loan proceeds to the shadow Baroda

bank accounts held in the names of the Group Companies but controlled exclusively by the

Individual Defendants. Once the funds were transferred to the shadow bank accounts, those funds



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were misappropriated by the Individual Defendants and used to pay kickbacks to their co-

conspirators in the finance departments of the Group Companies and, upon information and belief,

to the Baroda, EY and CEB executives who participated in this multi-billion-dollar fraud.

138. As with any massive fraud, it is eventually exposed when the fraudulent enterprise

cannot keep up with its debt obligations and is forced to open its books. By late 2019 and early-

2020, the Defendants’ systematic theft of the loan proceeds resulted in NMC and the other Group

Companies being unable to repay the supply chain finance loans. Consequently, NMC went into

administration and the lenders commenced enforcement actions on the loans against the Group

Companies and Dr. Shetty became collateral damage based on the forged personal guarantees

manufactured by the Individual Defendants.

(vii) Illustrative Examples of the Roundtripping Fraud

139. Dr. Shetty’s investigation uncovered the Defendants’ roundtripping conspiracy

based on the documents and witnesses questioned at Neopharma. Most of the communications

between and among the co-conspirators were undertaken outside of Neopharma company email.

Fact discovery in this case will uncover the Defendants’ communications in due course. However,

Dr. Shetty’s investigation revealed that the Defendants’ roundtripping took off after CEB proved

itself to be the successful test case for perpetuating this fraudulent scheme, in part by using supply

chain financing.

CEB’s and Baroda’s Roles in the Conspiracy

140. In late 2013, the Manghat Brothers and Kumar solicited CEB Executives Cenk

Atmaca and Aamir Habib to explore their bank’s appetite to provide supply chain financing for

NMC. In 2013, Messrs. Atmaca and Habib were senior executives at CEB for the MENASA

region (Middle East, North Africa, and South Asia) and were located primarily in Dubai, UAE.



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141. CEB is a large multi-national bank headquartered in Amsterdam, Netherlands and

concentrates in the high-risk industry of trade finance. Based on the Manghat Brothers’ and

Kumar’s overtures, Messrs. Atmaca and Habib sensed an opportunity to grow CEB’s trade finance

loan business in their respective region ostensibly on behalf of a blue-chip company in the Middle

East such as NMC.

142. Within a few weeks, it was apparent to Atmaca and Habib that the Individual

Defendants were seeking a trade finance conspirator to assist them in inflating the Group

Companies’ financials, especially NMC. In early December 2013, the Individual Defendants

brought Atmaca and Habib into their confidences and invited them into the conspiracy to inflate

the Group Companies’ financials using supply-chain financed roundtripping transactions.

143. Atmaca and Habib agreed to have CEB join the conspiracy as the prospect of

making a five percent (5%) fee on roundtripped funds where the lender was effectively repaying

itself in 120 days in furtherance of the Individual Defendants’ scheme to inflate the Group

Companies’ financials was too lucrative to decline.

144. CEB (through Atmaca and Habib)7 at all relevant times knew of the specifics

concerning the roundtripping scheme.

145. Upon information and belief, Atmaca received kickbacks from the misappropriated

funds for CEB’s participation in the supply chain finance roundtripping scheme between 2013 and

2019.

146. The agreement between CEB and the Individual Defendants in furtherance of the

roundtripping conspiracy was straightforward. The Individual Defendants needed to show both

7 Habib left CEB in June 2014 and Atmaca separated from CEB in January 2016. Upon their separations from CEB, the NMC account passed to their successor Onur Nazlicicek, Senior Executive Officer and Director of CEB (Dubai), who continued the corrupt relationship and kept CEB in the conspiracy until the end of 2019 when Muddy Waters first exposed the NMC accounting fraud.



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(i) regular, large influxes of cash and (ii) large volumes of pharmaceutical supplies being

purchased and sold by the Group Companies such as Neopharma and Nexgen to artificially inflate

the Group Companies’ financials, and particularly NMC’s financials to prop up the company’s

stock price. For its part, CEB would “earn” five percent (5%) fees on all supply chain transactions,

which CEB knew were based on fake invoices where no products or supplies were actually sold.

147. The Individual Defendants disclosed to the CEB Executives the particulars of the

roundtripping scheme, which relied heavily on fake invoices ostensibly issued by Neopharma and

Nexgen for pharmaceutical supplies sold to NMC.

148. In addition, the Individual Defendants informed CEB that they formed “shell” and

fictitious entities with no business purposes whatsoever beyond opening Baroda bank accounts

controlled by the Individual Defendants so they could create even more fictitious invoices for non-

existent medical supplies on their behalf to further bolster the appearance of growth at NMC.

149. The Individual Defendants’ fictitious entities formed for the sole purpose of

submitting fake invoices and receiving trade finance payments from CEB in furtherance of the

roundtripping conspiracy include: (i) DDA General Trading LLC (“DDA”), a fictitious entity

listing (on the fake invoices submitted to NMC) the non-existent “[email protected]” as its contact e-

mail address;8 (ii) Apex Everest General Trading LLC (“Apex”), another fictitious entity listing

(on the fake invoices submitted to NMC) the same non-existent “[email protected]” e-mail address,

and also listing the identical contact phone and fax numbers as the ones listed on the DDA invoices;

(iii) Megafin General Trading LLC (“Megafin”), another fictitious entity listing (on the fake

invoices submitted to NMC) the same non-existent “[email protected]” e-mail address, and also listing

8 The URL “eim.com” is a domain managed by Etisalat, a large telecommunications provider in the UAE. An e-mail sent on May 3, 2021, to [email protected] was returned as “Undeliverable” within seconds of being sent.



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the identical contact phone and fax numbers as the ones listed on the DDA and Apex invoices;9

(iv) Falcon Trading Corp. (“Falcon”), yet another fictitious entity, purportedly located in Sharjah,

UAE; and (v) Beiersdorf Cosmetics Trading Company LLC (“Beiersdorf”), a purported subsidiary

of Beiersdorf AG (Germany), but with a name “Beiersdorf Cosmetics Trading Company LLC”

and an Al Ain, UAE address that is not listed on Beiersdorf AG’s website or anywhere else in

publicly available records as being connected to Beiersdorf AG. The Individual Defendants’

fictitious entities DDA, Apex, Megafin, Falcon and Beiersdorf are hereinafter collectively referred

to as the “Shell Entities.”

150. Each of the invoices submitted by the Individual Defendants on behalf of the Shell

Entities contained information that easily evidenced that the invoices were fake, such as non-

existent websites, non-existent telephone numbers and non-existent email addresses.

151. The first credit facility between CEB and NMC for $15 million closed on December

29, 2013. On the next day, December 30, 2013, NMC maxed-out the credit facility by purportedly

purchasing in excess of $14.98 million of pharmaceuticals and other related products from Falcon

and Nexgen.

152. For the next six years until NMC collapsed, CEB funded $200 million of fraudulent

transactions in furtherance of the roundtripping scheme. Not a single invoice that CEB “paid”

was legitimate. This fact would have been easily verifiable if CEB’s compliance department or

those of its correspondent bank Baroda performed even the most cursory review of the invoices

let alone scrutinized them as required under the BSA. CEB earned approximately $10 million in

fraudulent fees in exchange for its purported supply chain financing services.

9 Megafin also lists the website megafingentrade.ae on its invoices, but like the non-existant e-mail address, this website does not exist and displays only an error page.



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153. CEB amended its credit facility with NMC on May 1, 2014, June 1, 2015, and June

18, 2019, at which time the credit limit was increased to $25 million.

154. As part of the roundtripping conspiracy, CEB, the Individual Defendants and

Baroda (through the Baroda Executives) agreed that Baroda through its New York branch

(“Baroda NY”) would serve as CEB’s correspondent bank for the supply chain finance payments

made in respect of the fake invoices. The Defendants agreed to have Baroda serve as the

correspondent bank for CEB even though CEB was able to clear its own USD transactions because

Baroda was willing to violate AML laws. Specifically, Baroda was willing to and did violate AML

laws requiring a correspondent bank to investigate the legitimacy of its customer’s (i.e., CEB)

trade finance transactions and report any suspicious transactions concerning same to United States

regulators.

155. The following transactions are illustrative of the illicit agreement between the

Defendants concerning the roundtripping conspiracy and underscore the actions taken by CEB in

furtherance of the Defendants’ conspiracy:

a. On December 30, 2013, just one (1) day after executing the 2013 initial CEB Credit Facility, CEB transferred $7,142,948.57 on behalf of NMC Medical Trading LLC, to Falcon’s Baroda account (x21592);

b. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

c. Upon receipt of the funds into Falcon’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

d. On the same day, December 30, 2013, and virtually maxing-out the 2013 $15 million credit facility with CEB, CEB transferred $7,841,153 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);

e. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

f. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.



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g. On May 8, 2014, CEB transferred $9,914,050 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);

h. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

i. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

j. On May 14, 2014, CEB transferred $5,000,000 on behalf of NMC Medical Trading LLC, to Falcon’s Baroda account (x8369), virtually maxing-out the CEB trade finance facility;

k. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

l. Upon receipt of the funds into Falcon’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

m. On June 16, 2014, CEB transferred $3,085,000 on behalf of NMC Medical Trading LLC, to Falcon’s Baroda account (x8369);

n. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

o. Upon receipt of the funds into Falcon’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

p. On November 12, 2014, CEB transferred $7,388,620 on behalf of NMC Medical Trading LLC, to Beiersdorf’s Baroda account (x3429);

q. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

r. Upon receipt of the funds into Beiersdorf’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

s. On the same day, November 12, 2014, CEB transferred $10,611,380 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);

t. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

u. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

v. On June 2, 2015, CEB transferred $11,261,680 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);

w. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;



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x. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

y. Less than four (4) minutes later, after the Nexgen transaction directly above, CEB transferred $3,391,416.78 on behalf of NMC Medical Trading LLC, to DDA’s Baroda account (x9940);

z. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

aa. Upon receipt of the funds into DDA’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

bb. Ten (10) seconds after executing the DDA transaction directly above, and only four (4) minutes and three (3) seconds after the June 2, 2015 Nexgen transaction, CEB transferred $3,341,400 on behalf of NMC Medical Trading LLC, to Apex’s Baroda account (x9845);

cc. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

dd. Upon receipt of the funds into Apex’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

156. Notwithstanding the highly suspicious nature of the three (3) transactions being

directed by the same entity (within seconds of each other), through the same mandated

correspondent bank, to the same receiving bank, the DDA and Apex invoices were themselves

highly suspicious. (See Paragraph 155(v)-(dd)). Indeed, even a cursory review of the invoices

shows that both DDA and Apex use the same (non-existent) “[email protected]” e-mail address and

also list the identical contact phone and fax numbers. DDA and Apex also use strikingly similar

art (showing a snow-covered mountain) at the top-left corner of their respective invoices.

157. The aforementioned indicators of fraud explain the importance of both Baroda and

CEB to the Defendants’ roundtripping conspiracy. The Individual Defendants needed banks that

were willing to flagrantly violate U.S. law by processing clearly fraudulent invoices both at the

supply chain finance level (i.e., CEB as the customer bank) and at the correspondent bank level

(i.e., Baroda). Indeed, this is exactly why the Individual Defendants and CEB reached an



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agreement with Baroda that all correspondent banking services for the CEB supply chain payments

in respect of the fictitious invoices be made through Baroda-NY.

158. The highly suspicious nature of the transactions continued throughout the six (6)

year conspiracy, including the following:

a. Two (2) days after the June 2, 2015 DDA transaction above, on June 4, 2015, CEB transferred $1,953,879.60 on behalf of NMC Medical Trading LLC, to DDA’s Baroda account (x9940);


c. Upon receipt of the funds into DDA’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

d. Ten (10) seconds after executing the DDA transaction directly above, CEB transferred $2,750,483.62 on behalf of NMC Medical Trading LLC, to Megafin’s Baroda account (x9008);


f. Upon receipt of the funds into Megafin’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC's Baroda account.

g. Ten (10) seconds after executing the Megafin transaction directly above, and only two days (2) after the prior Apex transaction, CEB transferred $2,301,140 on behalf of NMC Medical Trading LLC, to Apex’s Baroda account (x9845);


i. Upon receipt of the funds into Apex’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

159. Much like with DDA and Apex, Megafin used the same (non-existent) contact e-

mail address on its invoices. In addition, the website listed for Megafin, megafingentrade.com, is

also non-existent. Once again, however, each of these transactions were approved and processed

by both CEB and Baroda. And the fraudulent transactions continued:

a. On April 4, 2016, CEB transferred $7,465,842 on behalf of NMC Medical Trading LLC, to Beiersdorf’s Baroda account (x3429);



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c. Upon receipt of the funds into Beiersdorf’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

d. Four (4) minutes after the Beiersdorf transaction directly above, CEB transferred $9,015,203 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);



g. On June 21, 2016, CEB transferred $10,378,532.50 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);


i. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

j. On September 21, 2016, CEB transferred $3,289,303 on behalf of NMC Medical Trading LLC, to Beiersdorf’s Baroda account (x3429);


l. Upon receipt of the funds into Beiersdorf’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC's Baroda account.

m. Ten (10) seconds after executing the Beiersdorf transaction directly above, CEB transferred $3,381,882.50 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);

n. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

o. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

p. On October 26, 2016, CEB transferred $3,441,145 on behalf of NMC Medical Trading LLC, to Beiersdorf’s Baroda account (x3429);




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r. Upon receipt of the funds into Beiersdorf’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

s. On December 4, 2016, CEB transferred $1,116,900 on behalf of NMC Medical Trading LLC, to Beiersdorf’s Baroda account (x3429);

t. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

u. Upon receipt of the funds into Beiersdorf’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

v. Ten (10) seconds after executing the Beiersdorf transaction directly above, CEB transferred $3,248,320 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);

w. The Individual Defendants and CEB directed that the transaction be run through Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank;

x. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

160. Once again, and as clearly illustrated in the above examples, not a single bank

officer or compliance manager at CEB flagged any of these transactions or even so much as made

an inquiry into the legality of these transactions. To the contrary, CEB made $200 million in

supply chain financing payments in respect of patently fake invoices with glaring red flags at every

turn, including, but not limited to, (i) the unusual selection of Baroda-NY as CEB’s correspondent

bank, despite CEB’s worldwide presence in trade finance and ability to transact in USD through

its own correspondent bank, and (ii) the existence of patently bogus information contained in the

invoices themselves.

161. CEB’s participation in the conspiracy continued even after Atmaca and Habib

separated from CEB and its illicit activities and corrupt agreement with the remaining Defendants

were taken forward by their successor Onur Nazlicicek in January 2016. Indeed, CEB continued

with its fraudulent supply chain payments purportedly on behalf of NMC even after Atmaca’s

departure from CEB in January 2016, including:



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a. On April 13, 2017, CEB transferred $6,235,502 on behalf of NMC Medical Trading LLC, to Beiersdorf’s Baroda account (x3429);


c. Upon receipt of the funds into Beiersdorf’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

d. One (1) minute and two (2) seconds after executing the Beiersdorf transaction directly above, CEB transferred $7,671,702.50 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);



g. On August 1, 2017, CEB transferred $7,104,912 on behalf of NMC Medical

Trading LLC, to Beiersdorf’s Baroda account (x3429); h. The Individual Defendants and CEB directed that the transaction be run through

Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank; i. Upon receipt of the funds into Beiersdorf’s Baroda account, the Individual

Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

j. Less than five (5) minutes after executing the Beiersdorf transaction directly above, CEB transferred $7,481,445 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);


l. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

m. On August 30, 2017, CEB transferred $4,771,608 on behalf of NMC Medical

Trading LLC, to Beiersdorf’s Baroda account (x3429); n. The Individual Defendants and CEB directed that the transaction be run through

Baroda-NY (SWIFT Code: BARBUS33) as the correspondent bank; o. Upon receipt of the funds into Beiersdorf’s Baroda account, the Individual

Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

p. Thirty (30) seconds after executing the Beiersdorf transaction directly above, CEB transferred $2,367,536 on behalf of NMC Medical Trading LLC, to Nexgen’s Baroda account (x7928);



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r. Upon receipt of the funds into Nexgen’s Baroda account, the Individual Defendants directed Baroda to transfer the funds originating from CEB—on behalf of NMC—to NMC’s Baroda account.

162. Beginning in late-2017, the Individual Defendants, having been successful in

artificially inflating the financials of NMC and Nexgen through the fake CEB transactions—and

in order to correspondingly inflate the financials of Neopharma—began using fake Neopharma

invoices to process illusory transactions through their co-conspirator CEB.

163. On or about November 17, 2017, the Individual Defendants created and presented

a fake invoice (purportedly for purchases of Neopharma products) to CEB, in the amount of

$3,791,091.04. As with the all the prior invoices purportedly issued by Nexgen, DDA, Apex,

Megafin, Falcon, and Beiersdorf, and presented to CEB for payment, CEB paid Neopharma on the

invoice, despite the highly-suspicious nature and timing of the transactions.

164. The only difference with Neopharma’s invoices versus those from Nexgen or the

Shell Entities were that the payments from CEB were initially deposited in Neopharma’s bank

account with Al Masraf Bank (a UAE bank). Once the CEB money was deposited with Al Masraf

Bank, the funds were quickly transferred by the Individual Defendants to a Neopharma Baroda

account and then immediately transferred again into a NMC account at Baroda.

165. Over the course of the next two (2) years, through December 2019 when the Muddy

Waters report was released, CEB “paid” another $100 million dollars in respect of fictitious

Neopharma and Nexgen invoices, using Baroda-NY as the correspondent bank on all Nexgen

transactions.



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CEB Opens the Flood Gates to the Roundtripping Transactions

166. CEB’s initial credit facility agreement and its subsequent amendments and

extensions of credit limits provided the Individual Defendants with the credibility and track record

to solicit numerous other trade finance firms and banks for additional loans and credit facilities

purportedly on behalf of NMC and the other Group Companies. What followed, of course, was

an explosion in supply chain financed roundtripping transactions that fraudulently inflated the

Group Companies’ financials even further, and enabled the Defendants to misappropriate portions

of the larger loans that the Individual Defendants procured. Based on Dr. Shetty’s investigatory

findings to date, the Individual Defendants fraudulently procured at least one hundred seventy-

one (171) new trade finance loans and credit facilities following the original CEB credit facility,

many of which were procured only because the Individual Defendants unbeknownst to Dr. Shetty

provided forged personal guarantees in Dr. Shetty’s name as security for the new loans. Below

are illustrative examples of other supply chain infused roundtripping transactions:

Channel Trade Finance Transactions—Nexgen

167. In or about July 2019, Pra. Manghat entered NMC, Neopharma, and Nexgen into

supply chain finance agreements with Channel Trade Finance (“Channel Trade”). The

arrangement involved three (3) separate agreements among NMC, Neopharma, and Nexgen, with

the Nexgen agreement specifically executed by Pra. Manghat, as “Manager” of Nexgen.

168. Just like the CEB credit facilities, Dr. Shetty did not know of the Channel Trade

agreements and did not participate in their negotiation or execution. The Individual Defendants,

as with CEB’s credit facilities, forged Dr. Shetty’s signature on the Neopharma/Channel Trade

agreement. As is customary in supply chain financing transactions, all financing and transaction



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processing under the Channel Trade agreements were to be done in USD and thus required

transfers through New York.

169. And, in keeping with the Individual Defendants’ demand that Baroda-NY act as the

correspondent bank on these fictitious transactions, the Nexgen agreement mandates that Nexgen’s

invoices be paid on behalf of NMC to Nexgen’s Baroda account (ending x7928), in USD, through

Baroda-NY. That is, the Nexgen agreement with Channel Trade required that Baroda-NY be used

as the correspondent bank for all Nexgen transactions.

170. Dr. Shetty’s investigation is ongoing. However, the Nexgen/Channel Trade

transactions exhibit the same fraudulent roundtripping patterns as those found in the CEB

transactions:

a. On May 26, 2019, NMC issued itself an invoice in the name of Nexgen for $2,644,432;

b. On August 1, 2019, Channel paid $2,587,031.21 on this invoice; c. The payment was made to Nexgen, into Nexgen’s Baroda account, through Baroda-

NY, SWIFT Code: BARBUS33, as the correspondent bank, in accordance with the parties’ agreement;

d. On November 20, 2019, NMC (from its Baroda account) paid Channel $4,028,448.64 (this repayment included repayment for a separate transaction in addition to this one). This payment, in USD, appears to have been cleared through Bank of New York—Mellon (New York, New York), as the correspondent bank.

e. On November 23, 2019, NMC issued itself an invoice in the name of Nexgen for $4,078,139;

f. On November 25, 2019, Channel paid $3,940,741.58 on this invoice; g. The payment was made to Nexgen, into Nexgen’s Baroda account, through Baroda-

New York, SWIFT Code: BARBUS33, as the correspondent bank, in accordance with the parties’ agreement.

h. On December 15, 2019, NMC issued itself an invoice in the name of Nexgen for $154,942;

i. On December 17, 2019, Channel paid $149,721.82 on this invoice; j. The payment was made to Nexgen, into Nexgen’s Baroda account, through Bank

of Baroda-New York, SWIFT Code: BARBUS33, as the correspondent bank, in accordance with the parties’ agreement.



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Channel Trade Finance Transactions—Neopharma

171. The Individual Defendants used Neopharma’s Al Masraf Bank and its long-

established New York City correspondent banks to process purported supply chain finance

transactions involving Neopharma and NMC in furtherance of the roundtripping scheme.

172. The trade finance agreement between Neopharma and Channel Trade mandated

that all payments to Neopharma be made to Neopharma’s Al Masraf bank account (ending x0877)

in USD, using the Bank of New York-Mellon (New York City), SWIFT: IRVTUS3N, as the

correspondent bank. The agreement between Neopharma and Channel Trade was purportedly

signed by Dr. Shetty, but it is yet another forgery by the Individual Defendants. The agreement

was purportedly signed on July 2019, long after Dr. Shetty ceased involvement in the day-to-day

operations of the Group Companies, including Neopharma.

173. Much like Nexgen, however, all the roundtrip supply chain financing transactions

occurred in the same way and involved Baroda at every step. The following are some illustrative

examples:

a. On April 19, 2018, Channel deposited AED40,069,418.96 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

b. On the same day, Neopharma transferred AED40,050,000.00 from its Al Masraf account to a Neopharma account held at Baroda;

c. Immediately after that deposit hit the Baroda account, AED40,050,000.00 was transferred, within Baroda, to a Baroda account held by NMC.

d. On September 8, 2018, Channel deposited AED7,522,693.68 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

e. The next day, September 9, 2018, Neopharma transferred AED7,522,000.00 from its Al Masraf account to a Neopharma account held at Baroda;

f. Immediately after that deposit hit the Baroda account, AED7,522,000.00 was transferred, within Baroda, to a Baroda account held by NMC.



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g. A week later, on September 15, 2018, Channel deposited AED6,133,247.61 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

h. Two days later, on September 17, 2018, Neopharma transferred AED6,133,000.00 from its Al Masraf account to a Neopharma account held at Baroda;

i. Immediately after that deposit hit the Baroda account, AED6,133,000.00 was transferred, within Baroda, to a Baroda account held by NMC.

j. On January 26, 2019, Channel deposited AED29,935,170.32 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

k. The next day, January 27, 2019, Neopharma transferred AED29,935,100.00 from its Al Masraf account to a Neopharma account held at Baroda;

l. Immediately after that deposit hit the Baroda account, AED29,935,100.00 was transferred, within Baroda, to a Baroda account held by NMC.

m. Four (4) days later, on January 31, 2019, Channel deposited AED7,323,590.42 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

n. Three (3) days later, on February 3, 2019, Neopharma transferred AED7,323,400.00 from its Al Masraf account to a Neopharma account held at Baroda;

o. Immediately after that deposit hit the Baroda account, AED7,323,400.00 was transferred, within Baroda, to a Baroda account held by NMC.

p. On April 17, 2019, Channel deposited AED7,447,738.45 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

q. The next day, on April 18, 2019, Neopharma transferred AED7,447,700,00 from its Al Masraf account to a Neopharma account held at Baroda;

r. Immediately after that deposit hit the Baroda account, AED7,447,700,00 was transferred, within Baroda, to a Baroda account held by NMC.

s. The next week, on April 24, 2019, Channel deposited AED37,587,432.42 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

t. The next day, on April 25, 2019, Neopharma transferred AED37,587,400.00 from its Al Masraf account to a Neopharma account held at Baroda;

u. Immediately after that deposit hit the Baroda account, AED37,587,400.00 was transferred, within Baroda, to a Baroda account held by NMC.

v. On May 22, 2019, Channel deposited AED20,760,363.47 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

w. The next day, on May 23, 2019, Neopharma transferred AED20,760,300.00 from its Al Masraf account to a Neopharma account held at Baroda;



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x. Immediately after that deposit hit the Baroda account, AED20,760,300.00 was transferred, within Baroda, to a Baroda account held by NMC.

y. Four (4) days later, on May 27, 2019, Channel deposited AED21,308,405.62 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

z. The next day, May 28, 2019, Neopharma transferred AED21,308,400.00 from its Al Masraf account to a Neopharma account held at Baroda;

aa. Immediately after that deposit hit the Baroda account, AED21,308,400.00 was transferred, within Baroda, to a Baroda account held by NMC.

bb. On July 11, 2019, Channel deposited AED8,765,371.11 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

cc. Three days later, on July 14, 2019, Neopharma transferred AED8,765,300.00 from its Al Masraf account to a Neopharma account held at Baroda;

dd. Immediately after that deposit hit the Baroda account, AED8,765,300.00 was transferred, within Baroda, to a Baroda account held by NMC.

ee. On September 11, 2019, Channel deposited AED13,370,749.27 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

ff. Four (4) days later, on September 15, 2019, Neopharma transferred AED13,370,749.00 from its Al Masraf account to a Neopharma account held at Baroda;

gg. Immediately after that deposit hit the Baroda account, AED13,370,749.00 was transferred, within Baroda, to a Baroda account held by NMC.

hh. On November 14, 2019, Channel deposited AED38,353,175.25 (after the currency conversion from USD by the Bank of New York Mellon (New York, New York)) into Neopharma’s Al Masraf account;

ii. Two days later, on November 16, 2019, Neopharma transferred AED38,353,175.00 from its Al Masraf account to a Neopharma account held at Baroda;

jj. Immediately after that deposit hit the Baroda account, AED38,353,175.00 was transferred, within Baroda, to a Baroda account held by NMC.

174. Based on Dr. Shetty’s investigation, which remains ongoing, the total value of the

transactions financed between NMC, Neopharma, and Channel Trade was $156 million.

175. With the exception of some rounding at the Al Masraf level, every dollar of these

transactions was routed to NMC, through a Neopharma account held at Baroda. And, in each

instance, the money was in Neopharma’s Baroda account for less than a day before it was



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transferred, in the exact amount it came in, to a NMC account within Baroda. The transactions

were obviously part of a money laundering scheme, and the only reason the transactions were not

flagged is because Baroda was conspiring with the other Defendants to carry out the fraud against

Plaintiffs.

BNP Paribas Transactions

176. Based on Dr. Shetty’s investigatory findings to date, the Individual Defendants

procured supply chain financing from BNP Paribas (“BNP”) to finance numerous transactions

between NMC and Neopharma, based entirely upon fake invoices issued by and to NMC in the

name of Neopharma, from 2016 through 2019. All of the BNP supply chain transactions were not

only premised on fake invoices but the transactions were used in furtherance of the Defendants’

roundtripping scheme.

177. Similar to the Channel Trade and CEB transactions, all payments by BNP to

Neopharma were done in USD, through a correspondent bank in New York City, and all invoices

issued by and to NMC in the name of Neopharma—for payment by BNP—were issued in USD.

178. The following are samples of these transactions:

a. On November 17, 2016, BNP deposited AED8,031,600 (after conversion from USD through a correspondent bank in New York City) into Neopharma’s Al Masraf account;

b. Three (3) days later, on November 20, 2016, Neopharma transferred AED8,031,600 from its Al Masraf account to a Neopharma account held at Baroda;

c. Immediately after that deposit hit the Baroda account, AED8,031,600 was transferred, within Baroda, to a Baroda account held by NMC.

d. On March 20, 2017, BNP deposited AED7,400,028 (after conversion from USD through a correspondent bank in New York City) into Neopharma’s Al Masraf account;

e. The next day, March 20, 2017, Neopharma transferred AED7,400,000 from its Al Masraf account to a Neopharma account held at Baroda;

f. Immediately after that deposit hit the Baroda account, AED7,400,000 was transferred, within Baroda, to a Baroda account held by NMC.



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g. On July 18, 2017, BNP deposited AED7,918,850 (after conversion from USD through a correspondent bank in New York City) into Neopharma’s Al Masraf account;

h. The next day, July 19, 2017, Neopharma transferred AED7,918,000 from its Al Masraf account to a Neopharma account held at Baroda;

i. Immediately after that deposit hit the Baroda account, AED7,918,000 was transferred, within Baroda, to a Baroda account held by NMC.

j. On January 8, 2018, BNP deposited AED9,698,329 (after conversion from USD through a correspondent bank in New York City) into Neopharma’s Al Masraf account;

k. The next day, on January 9, 2018, Neopharma transferred AED9,698,000 from its Al Masraf account to a Neopharma account held at Baroda;

l. Immediately after that deposit hit the Baroda account, AED9,698,000 was transferred, within Baroda, to a Baroda account held by NMC.

m. On April 26, 2018, BNP deposited AED8,063,370 (after conversion from USD through a correspondent bank in New York City) into Neopharma’s Al Masraf account;

n. Three (3) days later, on April 29, 2018, Neopharma transferred AED19,972,000 (the approximate combined BNP/DIB deposits, see below) from its Al Masraf account to a Neopharma account held at Baroda;

o. Immediately after that deposit hit the Baroda account, AED19,972,000 was transferred, within Baroda, to a Baroda account held by NMC.

179. From the information available to Dr. Shetty so far, the total amount of supply chain

finance activity roundtripped between NMC, Neopharma, and BNP, was at least AED130,995,060

(approximately $35.6 million). With the exception of some rounding at the Al Masraf Bank level,

all of these funds were initially deposited by BNP with a Neopharma account at Al Masraf Bank,

quickly transferred to a Neopharma account at Baroda, then immediately transferred (in amounts

equaling exactly what was deposited from the Al Masraf account), within Baroda, to a NMC

Baroda account.

Dubai Islamic Bank Transactions

180. Here again, Dr. Shetty’s investigation which remains ongoing uncovered evidence

of roundtripping using supply chain financing from Dubai Islamic Bank (“DIB”) for numerous

transactions between NMC and Neopharma, based entirely upon fake invoices issued by and to



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NMC in the name of Neopharma, during 2017 through 2019. The following are samples of these

transactions:

a. On April 2, 2018, DIB deposited AED13,996,762.50 into Neopharma’s Al Masraf account;

b. The next day, on April 3, 2018, Neopharma transferred AED13,996,700 from its Al Masraf account to a Neopharma account held at Baroda;


d. Two (2) weeks later, on April 17, 2018, DIB deposited AED10,926,753 into Neopharma’s Al Masraf account;

e. The next day, on April 17, 2018, Neopharma transferred AED10,927,100 from its Al Masraf account to a Neopharma account held at Baroda;


g. One (1) week later, on April 25, 2018, DIB deposited AED11,908,705 into Neopharma’s Al Masraf account;

h. The next day, on April 26, 2018, apparently concerned about what would have been its fourth supply chain finance transaction with DIB in April 2018, BNP deposited the AED8,063,370 into Neopharma’s Al Masraf account (see above, BNP transaction list);

i. Three (3) days later, on April 29, 2018, Neopharma transferred AED19,972,000 (the approximate combined BNP/DIB deposits) from its Al Masraf account to a Neopharma account held at Baroda;

j. Immediately after that deposit hit the Baroda account, AED19,972,000 was transferred, within Baroda, to a Baroda account held by NMC.

k. On October 15, 2018, DIB deposited AED15,033,751 into Neopharma’s Al Masraf account;

l. The next day, on October 16, 2018, Neopharma transferred AED15,033,000 from its Al Masraf account to a Neopharma account held at Baroda;

m. Immediately after that deposit hit the Baroda account, AED15,033,000 was transferred, within Baroda, to a Baroda account held by NMC.

n. On April 11, 2019, DIB deposited AED17,987,821 into Neopharma’s Al Masraf account;

o. Three (3) days later, on April 14, 2019, Neopharma transferred AED17,987,800 from its Al Masraf account to a Neopharma account held at Baroda;

p. Immediately after that deposit hit the Baroda account, AED17,987,800 was transferred, within Baroda, to a Baroda account held by NMC.



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181. From the information available to Dr. Shetty, the total amount of supply chain

finance activity transacted and roundtripped between NMC, Neopharma, and DIB, was at least

AED244,066,518 (approximately $66.5 million). With the exception of some rounding at the Al

Masraf Bank level, all of this money was initially deposited by DIB with a Neopharma account at

Al Masraf Bank, quickly transferred to a Neopharma account held at Baroda, then immediately

transferred (in amounts equaling exactly what was deposited from the Al Masraf Bank account),

within Baroda, to a NMC Baroda account.

ISCF Capital Ltd. Transactions

182. In the course of his investigation, Dr. Shetty discovered that ISCF Capital Ltd.

(“ISCF”) financed a handful of large transactions (totaling at least AED70,414,165, or

approximately $19.2 million) between NMC and Neopharma, based entirely upon fake invoices

issued by and to NMC in the name of Neopharma, in 2018 and 2019. All of these supply chain

transactions were also used in furtherance of the Defendants’ roundtripping scheme intended to

inflate the Group Companies’ financials, including NMC’s financials. The following is a sample

of these transactions:

a. On September 26, 2018, ISCF deposited AED17,623,120.25 into Neopharma’s Al Masraf account;

b. On the same day, Neopharma transferred AED17,623,000 from its Al Masraf account to a Neopharma account held at Baroda;


d. On March 27, 2019, ISCF deposited AED35,198,148.72 into Neopharma’s Al Masraf account;

e. The next day, Neopharma transferred AED47,524,300 (combining other transactions with the ISCF funding) from its Al Masraf account to a Neopharma account held at Baroda;




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Roundtripping Transactions Outside of the Supply Chain Financing Context

183. The Individual Defendants did not always use a supply chain financing company

to initiate their illicit roundtripping schemes. In the circumstances in which no trade finance firm

was involved, NMC would itself pay Neopharma on a fictitious invoice that NMC created (into

the Neopharma Al Masraf Bank account). The Individual Defendants would then transfer that

money to a Neopharma account held at Baroda, and the Individual Defendants would complete the

roundtrip by transferring the funds from Neopharma’s Baroda account to a Baroda account held

by NMC. This scenario played out dozens of times, and involved billions of Emirati Dirham

(AED), from 2016 through 2020. Upon information and belief, the same roundtripping pattern

occurred with the other Group Companies. The following are small samples of these transactions:

a. On November 12, 2016, NMC Healthcare LLC deposited AED15,275,961.71 into Neopharma’s Al Masraf account;

b. The next day, November 13, 2016, Neopharma transferred AED15,275,961.71 from its Al Masraf account to a Neopharma account held at Baroda;

c. Immediately after that deposit hit the Baroda account, AED15,275,961.71 was transferred, within Baroda, to a Baroda account held by NMC.

d. On February 21, 2017, NMC Specialty Hospital deposited AED9,032,852.90 into Neopharma’s Al Masraf account;

e. The same day, Neopharma transferred AED9,050,459.00 from its Al Masraf account to a Neopharma account held at Baroda;

f. Immediately after that deposit hit the Baroda account, AED9,050,459.00 was transferred, within Baroda, to a Baroda account held by NMC.

g. On July 15, 2017, NMC Healthcare LLC deposited AED24,448,279.39 into Neopharma’s Al Masraf account;

h. The next day, July 16, 2017, Neopharma transferred AED24,448,000.00 from its Al Masraf account to a Neopharma account held at Baroda;

i. Immediately after that deposit hit the Baroda account, AED24,448,000.00 was transferred, within Baroda, to a Baroda account held by NMC.

j. On August 3, 2017, New Medical Centre Trading deposited AED15,546,668.81 into Neopharma’s Al Masraf account;

k. On the same day, Neopharma transferred AED15,546,000.00 from its Al Masraf account to a Neopharma account held at Baroda;



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l. Immediately after that deposit hit the Baroda account, AED15,546,000.00 was transferred, within Baroda, to a Baroda account held by NMC.

m. The next week, on August 16, 2017, New Medical Centre Trading deposited AED16,168,049.10 into Neopharma’s Al Masraf account;

n. The same day, Neopharma transferred AED16,168,000.00 from its Al Masraf account to a Neopharma account held at Baroda;

o. Immediately after that deposit hit the Baroda account, AED16,168,000.00 was transferred, within Baroda, to a Baroda account held by NMC.

p. On January 18, 2018, New Medical Centre Trading deposited AED12,013,194.60 into Neopharma’s Al Masraf account;

q. Three (3) days later, on January 21, 2018, Neopharma transferred AED12,013,000.00 from its Al Masraf account to a Neopharma account held at Baroda;

r. Immediately after that deposit hit the Baroda account, AED12,013,000.00 was transferred, within Baroda, to a Baroda account held by NMC.

s. On March 7 and March 8, 2018, New Medical Centre Trading, NMC Healthcare LLC, and NMC Specialty Hospital deposited a combined AED34,042,334.40 into Neopharma’s Al Masraf account;

t. On March 11, 2018, Neopharma transferred AED34,058,000.00 from its Al Masraf account to a Neopharma account held at Baroda;

u. Immediately after that deposit hit the Baroda account, AED34,058,000.00 was transferred, within Baroda, to a Baroda account held by NMC.

v. On May 17, 2018, NMC Healthcare LLC deposited AED24,489,175.68 into Neopharma’s Al Masraf account;

w. Three (3) days later, May 20, 2017, Neopharma transferred AED24,489,175.00 from its Al Masraf account to a Neopharma account held at Baroda;

x. Immediately after that deposit hit the Baroda account, AED24,489,175.00 was transferred, within Baroda, to a Baroda account held by NMC.

y. On October 25, 2018, NMC Healthcare LLC and New Medical Centre Trading deposited AED25,176,324.44 into Neopharma’s Al Masraf account;

z. Three (3) days later, on October 28, 2017, Neopharma transferred AED25,176,000.00 from its Al Masraf account to a Neopharma account held at Baroda;

aa. Immediately after that deposit hit the Baroda account, AED25,176,000.00 was transferred, within Baroda, to a Baroda account held by NMC.

bb. On January 28, 2019, NMC Healthcare LLC deposited AED7,433,442 into Neopharma’s Al Masraf account;

cc. Two (2) days later, on January 30, 2019, Neopharma transferred AED7,433,400 from its Al Masraf account to a Neopharma account held at Baroda;



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dd. Immediately after that deposit hit the Baroda account, AED7,433,400 was transferred, within Baroda, to a Baroda account held by NMC.

ee. On April 10, 2019, NMC Healthcare LLC and New Medical Centre Trading deposited AED18,658,252.59 into Neopharma’s Al Masraf account;

ff. The next day, April 11, 2019, Neopharma transferred AED18,658,200.00 from its Al Masraf account to a Neopharma account held at Baroda;

gg. Immediately after that deposit hit the Baroda account, AED18,658,200.00 was transferred, within Baroda, to a Baroda account held by NMC.

hh. On October 14, 2019, New Medical Center Trading deposited AED14,231,190 into Neopharma’s Al Masraf account;

ii. The next day, October 15, 2019, Neopharma transferred AED14,231,190 from its Al Masraf account to a Neopharma account held at Baroda;

jj. Immediately after that deposit hit the Baroda account, AED14,231,190 was transferred, within Baroda, to a Baroda account held by NMC.

184. Similar to when a supply chain financing company was involved at the initial level,

and (once again) with the exception of some rounding at the Al Masraf Bank level, all of this

money was initially deposited by a NMC entity to a Neopharma account at Al Masraf Bank,

quickly transferred to a Neopharma account held at Baroda, then immediately transferred (in an

amount equaling exactly what was deposited from the Al Masraf Bank account), within Baroda,

to a NMC Baroda account.

185. Despite billions of Emirati Dirham and U.S. Dollars being roundtripped between

the same parties, within custodial Baroda accounts, Baroda’s compliance departments never

investigated the purpose, legitimacy, or illegality of what are on their face suspicious transactions

within Baroda. All of these related-party transfers were fraudulently authorized using forged

electronic signatures of Dr. Shetty on the transfer request forms.

186. These roundtripping transactions were able to become so massive because of EY’s

participation in the conspiracy and fraud, especially EY’s participation in the accounting fraud

designed to inflate the Group Companies’ financials, including NMC’s financials.



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(viii) EY’s Role in the Conspiracy and Fraud

187. As noted above, Pra. Manghat was responsible for NMC’s financials including

interfacing with the company’s auditor EY since his appointment as CFO in 2009. Beginning in

2009, Pra. Manghat began cultivating his relationship with EY. The EY Partners, including

Bassam El Hage, Victor Veger, Andre Kasparian, Mohammad Mobin Khan became all too cozy

with Pra. Manghat and the other Individual Defendants whom the EY Partners viewed as the future

of NMC and the Group Companies.

188. Over time, EY evolved from simply being a pliable auditor that performed soft

audits upon request from the Individual Defendants to an active co-conspirator in the Defendants’

scheme to inflate the Group Companies’ financials, including those of NMC. In exchange for

EY’s participation in the conspiracy and fraud, the EY Partners were rewarded, upon information

and belief, with kickback payments from the loans siphoned off and misappropriated by the

Defendants. In addition, the EY Partners continued a non-market and extra-lucrative relationship

on behalf of EY (albeit riddled with conflicts of interest) in which EY remained the auditor for all

of the Group Companies, an engagement that totaled in excess of $10 million per year to ensure

that none of the accounting red flags surfaced during the six (6) year conspiracy.

189. In or about mid-2012, Pra. Manghat directed EY’s relationship partners for the

Group Companies to cease substantive audits of the Group Companies. Shortly before this

directive, the NMC Board of Directors and the audit committee criticized Pra. Manghat for his

lack of diligence in responding to an EY management inquiry list. Pra. Manghat needed to invite

and keep EY in the conspiracy to inflate the Group Companies’ financials.



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190. Pra. Manghat accomplished his objective in 2013 by promising the EY Partners

kickback payments, plus a steady stream of audit and consulting fees from the Group Companies

if EY “played ball” with Pra. Manghat and the Individual Defendants.

191. From 2013 onward, EY became an active conspirator with the Individual

Defendants, Baroda and CEB with the agreement and shared objective to inflate the Group

Companies’ financials by not accounting for the supply chain financing transactions as debt on the

Group Companies’ balance sheets and then concealing thousands of roundtripping transactions in

what quickly became a debt-fueled Ponzi scheme.

192. EY assisted the Individual Defendants to inflate the Group Companies’ financials

but EY’s most significant contribution to the Defendants’ conspiracy was EY’s acts of

concealment in the face of its fiduciary duties to investigate and disclose the massive fraud that

took hold at the Group Companies, including NMC.

193. Dr. Shetty’s investigation of Neopharma’s records and emails has uncovered

systemic conspiratorial conduct between EY and the remaining Defendants in which the EY

Partners actively concealed the massive fraud at the Group Companies, including NMC. Although

Dr. Shetty’s information is limited to the Neopharma records, these documents bore relevant facts

on how EY and the other Defendants carried out their fraud across all the Group Companies.

194. For example, the email communications between EY and the Neopharma Finance

Employees who conspired with the Defendants at the direction of the Individual Defendants

revealed that EY actively assisted Neopharma to misstate its financial statements by artificially

inflating them.

195. For instance, EY was provided Neopharma’s revenue figures months in advance by

Neopharma’s Finance Employees and Kumar for EY’s consideration and comment. Kumar



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directed that the Neopharma Finance Employees solicit EY’s advice on how best to maximize

revenue figures, which resulted in multiple channel stuffing exercises anchored by more fictitious

invoices purporting to reflect supplies sold by Neopharma to NMC.

196. The most recent example of channel stuffing by EY and the Individual Defendants

occurred in September 2019. On September 29, 2019, Neopharma’s Finance employees Bhandari

and Rajeev (at the direction of Kumar and Pra. Manghat) sent EY an Excel spreadsheet titled

“revenue analysis,” which purported to show Neopharma’s monthly sales figures for all of 2019.

197. The spreadsheet, however, contained sales numbers for November and December

of 2019, even though the spreadsheet was created and sent in the third quarter of 2019, i.e., prior

to November/December 2019. The (projected) sales numbers for November 2019 represented a

whopping 200 percent increase over prior November figures, and the (projected) December 2019

sales numbers represented an astonishing 496 percent increase above prior December figures. The

fact that these sales figures were provided by the Individual Defendants to EY months before any

sales were made and reflected implausibly high sales volume in the last two (2) months of the

calendar year indicated clear channel stuffing activity. Yet, EY simply accepted the numbers in

preparing Neopharma’s audited financials.

198. EY’s concealment of the Defendants’ fraud was even more damaging to the

Plaintiffs and the shareholders of NMC and owners of the Group Companies at large. By 2013,

EY agreed to rubber-stamp audits for Neopharma and the Group Companies more generally,

including NMC.

199. Dr. Shetty’s investigation of Neopharma revealed that EY never questioned the

rampant roundtripping transactions that began in December 2013. In fact, the EY audit team never

requested nor received Neopharma’s bank statements in any given year during the six (6) year



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conspiracy. Relatedly, the EY audit team led by Mohammad Mobin Khan never inspected the

back-up information concerning the purported 1,400 adjustments to Dr. Shetty’s shareholder loan

account at Neopharma, which would have immediately alerted an arms-length auditor that a

massive accounting fraud was afoot.

200. To the contrary, Dr. Shetty’s investigations team found self-serving and defensive

emails from the EY audit team requesting the Individual Defendants and the Neopharma Finance

Employees “certify” that the related-party transfers were linked to the repayment of pre-existing

loans advanced by Dr. Shetty. At no time did EY confirm the value of those purported prior loans

made by Dr. Shetty or whether the so-called adjustments to his shareholder loan account resulted

in cash paid to him to offset the related-party transfers paid out of Neopharma and into NMC and

other Group Companies. Instead, the EY audit team simply accepted the Individual Defendants’

answers at face value without any follow-up or due diligence.

201. Glaringly, EY never took the simple and necessary step of contacting Dr. Shetty to

verify his knowledge of and participation in the transactions. EY’s omission was knowing and

intentional, because EY was participating in Defendants’ unlawful conspiracy.

202. To illustrate the impact on Neopharma from the artificial inflation of revenue

(through the roundtripped related-party transactions), Neopharma’s audited EY financial

statements for 2018 and first quarter 2019 indicated net sales figures of AED 465,611,050

($126,869,496), when in reality Neopharma’s actual net sales figures were AED 212,022,375

($57,771,764). The AED 253,588,675 ($69,097,731) difference between the EY reported net sales

figures and the actual net sales figures attributable to actual products sold by Neopharma was the

result of the inflated sales figures generated from the roundtripped related-party transactions.



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203. As previously explained, the Individual Defendants with the assistance from EY

used the inflated financials to then fraudulently procure additional loans from which the

Defendants would then misappropriate the loan proceeds but stick Neopharma with the debt

obligations and keep Dr. Shetty on the hook based on forged personal guarantees. Upon

information and belief, this scheme repeated itself at every Group Company.

204. The discrepancy between actual sales based on Neopharma products sold versus

fictitious sales was easily discoverable. During Dr. Shetty’s investigation of Neopharma’s records

and accounting platform, Dr. Shetty’s investigators discovered that Neopharma’s accounting

platform only maintained records (e.g., invoices and purchase orders) for the legitimate sales

transactions. No back-up records existed whatsoever at Neopharma for any of the fictitious

roundtripped related party transactions.

205. In other words, the fictitious invoices were created by the Individual Defendants at

NMC and money simply appeared in Neopharma’s bank account from the supply chain financing

lender with whom NMC had contracted for supply chain financing. The funds would then be

immediately transferred out of Neopharma to NMC or another Group Company before a portion

of those funds were ultimately misappropriated by the Defendants. Neopharma’s general ledgers

were managed by Kumar and his co-conspirators at Neopharma’s Finance Department. The

Neopharma general ledgers simply reflected a “sale” and “receivable” for the fictitious

transactions and never contained any back-up documentation. Over the six (6) year conspiracy,

EY never disclosed to Neopharma’s owners, such as Dr. Shetty that these material “sales figures”

appeared in Neopharma’s financials with no back-up information or substantiation anchoring the

revenue figures reported on the company’s audited financials.



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206. Notwithstanding EY’s active participation in artificially inflating the Group

Companies’ financial statements, EY falsely certified the accuracy of the Group Companies’

audited financial statements since 2014. EY’s actions were undertaken in furtherance of the

Defendants’ conspiracy to conceal their fraudulent scheme and provide the board members and

owners of the Group Companies with a false sense of comfort that the Group Companies were

aggressively growing as a result of legitimate business enterprise and that the financial statements

accurately reflected the financial health of the companies. For example, the EY Auditor’s Report

for the audited financial statements for the fifteen months ending March 31, 2019, provided:

We have audited the consolidated financial statements of Neo Pharma LLC (“Company”) and its subsidiaries (collectively the “Group”), which comprises the consolidated statement of financial position as of 31 December 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of 31 December 2017 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRSs”).

The foregoing EY audit opinion was identical for Neopharma in each of the preceding years

beginning in 2014. Similar language was used by EY for the other Group Companies’ audited

financial statements whereby EY certified as to the accuracy of a particular Group Company’s

financial statements.

207. To illustrate how EY, Baroda and the Individual Defendants acted in concert to

conceal the fraudulently inflated Neopharma financials, and upon information and belief, those of

the other Group Companies, the correspondence between and among Baroda, EY and the

Individual Defendants is revealing.



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208. In March 2019, Baroda’s own auditor pressed Baroda’s Executives to verify the

legitimacy of the transaction history of the Group Companies’ Baroda accounts and the account

balances on deposit for each Group Company Baroda account. Baroda’s Executives informed the

Individual Defendants that Baroda needed EY to verify the legitimacy of the Group Companies’

transaction history and account balances to avoid raising the suspicions of Baroda’s auditor.

209. Baroda, EY and the Individual Defendants agreed to have Baroda send a pretextual

letter to EY seeking validation that the transactions and account balances were legitimate and

accurate so that Baroda could assuage any potential concerns raised by its auditor and so that the

conspiracy could continue unabated and undiscovered.

210. On March 4, 2019, in furtherance of the conspiracy, Sudershan (one of the Baroda

Executives) issued a letter directly to EY and purported to request that EY confirm the accuracy

of the Neopharma account balances and transaction history. Upon information and belief, similar

letters were sent by Baroda to EY for the other Group Companies.

211. EY’s Sameeh Ullah forwarded the Baroda letter on the same day to Kumar and

Vivek Bhatt (“Bhatt”), Neopharma’s assistant GM of Finance and Accounts seeking Kumar’s

instructions on how to respond to Baroda. On July 25, 2019, EY certified the accuracy of the

Neopharma account balances and transaction history to Baroda even though EY never received

the bank statements from Neopharma. Upon information and belief, EY falsely certified the

accuracy of the bank statements for all the other Group Companies.

212. EY’s participation in the Defendants’ conspiracy is further confirmed by its

treatment of one of its own senior audit partners (Cameron Cartmell) who insisted on performing

an arms-length audit of NMC and the Group Companies. In 2016, EY removed Cartmell from the

Group Company accounts. In 2016, Cartmell, then the EY responsible audit partner for the Group



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Companies, recognized that the Group Company audits were pre-determined and not handled with

any rigor let alone the appropriate standard of care. Cartmell sought to implement a genuine audit

at the Group Companies in 2016, and as a result Cartmell was abruptly removed from the Group

Company engagement by EY.

213. The removal had nothing to do with Cartmell’s performance. To this day, Cartmell

leads EY’s Private leader group covering the UK, Europe, the Middle East, India, and Africa.

Cartmell was removed by EY from the Group Company accounts in 2016, at the direction of the

Individual Defendants who did not want to risk the disclosure of the Defendants’ fraud.

214. With Cartmell removed from the Group Company accounts, EY’s concealment of

the Defendants’ fraud continued undisturbed until December 17, 2019 when Muddy Waters

released its report documenting widespread corporate governance issues and accounting

irregularities.

(ix) Impact on United States Investors & Dr. Shetty

215. On or about April 6, 2015, a Form F-6 was filed with the Securities and Exchange

Commission (SEC), placing American Depository Receipts (ADR) (totaling ten (10) million

American Depository Shares (ADS)) for NMC Health Plc’s common securities with Deutsche

Bank Trust Company Americas, at 60 Wall Street, New York, New York. Although the NMC

Health Plc ADS shares did not start trading in the U.S. until September 2015, it appears that the

ADR filing in the U.S. sent the LSE stock price for NMC up on that news.

216. Approximately five (5) weeks later, on May 13, 2015, a second Form F-6 was filed

with the SEC placing additional ADRs for NMC Health Plc’s common securities in the U.S. (this

time totaling fifty (50) million ADSs) with Citibank, N.A., at 399 Park Avenue, New York, New



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York. In this second filing, it was made clear that each ADS “represent[s] the right to receive one

(1) ordinary share of NMC Health plc.”

217. By no later than September 2015, the equivalent of sixty (60) million shares of

NMC Health Plc securities were being offered for sale and exchange to U.S. investors in the United

States.

218. As noted above, the news regarding the Individual Defendants’ fraud was initially

disclosed through the Muddy Waters report on December 17, 2019. On December 16, 2019, NMC

Heath Plc ADS shares closed at $34.68.

219. On December 17, 2019, after the release of the Muddy Waters report, NMC Health

Plc ADS shares fell 33.6 percent, to close at $23.00. Over the course of the next several weeks

and months, as the true extent of the fraud continued to be reported in the public domain, on March

10, 2020, NMC Heath Plc ADS shares closed at $1.85. Currently, NMC Health Plc ADS shares

trade at less than fifty (50) cents per share, having wiped out nearly the entire equity investment

of pre-December 17, 2019 equity for U.S. investors.

220. In sum, on December 16, 2019, U.S. investors held over $2 billion in NMC Health

Plc securities, and due to the Defendants’ fraud as set forth herein, those same investments are

worth less than $20 million today. Accordingly, U.S. shareholders have sustained approximately

$2 billion in losses from the Defendants’ fraud.

221. Dr. Shetty, although a foreign shareholder, was the second largest shareholder of

NMC at the time the Muddy Waters Report was released and its immediate aftermath with an

ownership stake of 9.81%. As a result of the Defendants’ roundtripping fraud and debt-fueled

Ponzi scheme that left NMC unable to repay the debt obligations procured by the Defendants, Dr.



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Shetty has sustained $800 million in damages reflecting his near total loss of NMC stock

proximately caused by the Defendants’ illicit conduct.

(x) Credit Facility/Loan Fraud Against Dr. Shetty

222. As set forth above, the Defendants needed regular influxes of capital because

although the roundtripping and fictitious related-party sales made it appear that business was

booming for the Group Companies, the reality is that merely moving money around—and then

siphoning money at every step—will collapse even the largest companies very quickly. And the

supply chain finance transactions provided only a short-term solution.

223. So, the Individual Defendants increasingly turned to banks for new credit facilities,

or to increase ones already in place. Defendants’ roundtripping scheme provided the outward

appearance that the Group Companies, including NMC were profitable. This made the Group

Companies attractive for banks to extend new loans.

224. Between 2015 and late-2019, the Group Companies were an enterprise with which

banks wanted to partner. Knowing this, the Individual Defendants frequently sought to improve

their available cash position through credit facilities. In order to maximize available cash in any

given credit facility, the Individual Defendants forged documents representing Dr. Shetty as the

guarantor of the facility. Dr. Shetty’s name and sterling business reputation carried a lot of weight

with financial institutions, particularly in India and the Middle East.

225. It worked. From 2015, through the end of 2019, the Individual Defendants were

able to procure $5.05 billion from at least one hundred seventy-two (172) credit facilities and loans

from various banks, including their own co-conspirator Baroda, which “loaned” the Group

Companies $246 million knowing the Individual Defendants were providing forged personal

guarantees by Dr. Shetty to backstop any risk exposure on their loans. Indeed, Baroda itself issued



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nine (9) loans, seven (7) of which include purported personal guarantees signed by Dr. Shetty –

with all of such purported personal guarantees forged by the Individual Defendants. The non-

Baroda credit facilities also contained forged personal guarantees purportedly from Dr. Shetty.

226. In total, based on Dr. Shetty’s investigation to date, the total outstanding personal

exposure to Dr. Shetty from these fraudulently procured loans/credit facilities is $4.53 billion.

227. Dr. Shetty was unaware of these new loans and credit facilities. He did not agree

to the terms of the loans, which did not inure to his benefit or to the benefit of any of the Group

Companies. Nor did Dr. Shetty sign any of the personal guarantees tied to the new loans that the

Individual Defendants fraudulently procured in furtherance of their Ponzi scheme. All of these

fraudulent loans and forged personal guarantees appeared at a time when Dr. Shetty was no longer

actively managing the Group Companies.

228. To put the scale of the fraud in perspective, 127 of the 172 fraudulently procured

loans were accompanied by forged personal guarantees in the name of Dr. Shetty that purported

to personally guarantee ninety percent (90%) of the total Group Companies’ debt (i.e., $4.53

billion out of $5.05 billion in total debt). For example, the Individual Defendants procured $427

million in loans “on behalf” of Neopharma yet the company did not retain a single dollar in loan

proceeds. The Individual Defendants orchestrated forged personal guarantees by Dr. Shetty in the

amount of $313 million to secure Neopharma’s $427 million in purported borrower obligations.

229. All 127 fraudulent guarantees in question were forged between 2016 and 2019 over

the course of a four-year period when Dr. Shetty was between the ages of seventy-four (74) and

seventy-seven (77) and years after he ceased active management of the Group Companies in late

2012. The frequency of these forged guarantees “backing” these fraudulently procured loans was

staggering – averaging two (2) to three (3) per month between 2016 and 2019.



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230. More than fifty percent (50%) of the fraudulently procured loans were one-off loans

whereby the Individual Defendants moved from one lender to the next in furtherance of the

Defendants’ Ponzi scheme. Illustrative examples of the loans fraudulently procured in the names

of the Group Companies by the Individual Defendants are:

Abu Dhabi Commercial Bank (14 loans totaling $775 million)

Abu Dhabi Islamic Bank (1 loan $49.5 million)

Ajman Bank (1 loan $43.6 million)

Al Ahli Bank (Kuwait) (3 loans $157 million)

Al Masraf Bank (3 loans $15 million)

Arab Bank (1 loan $27.2 million)

Axis Bank (3 loans $105 million)

Bank ABC (1 loan $125 million)

Baroda (9 loans $246 million)

Barclays (1 loan $85.8 million)

BNP Paribas (1 loan $31.3 million)

Canara Bank (2 loans $100.1 million)

Central Bank of India (1 loan $42.2 million)

Channel Trade Finance (1 loan $7 million)

Commercial Bank of Dubai (2 loans $113 million)

Commercial Bank International (1 loan $39.8 million)

Credit Europe Bank (1 loan $25 million)

Doha Bank (3 loans $51 million)

Dubai Islamic Bank (7 loans $284 million)



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Falcon Private Bank (1 loan $30 million)

FEB Capital (1 loan $37.6 million)

Federal Bank (India) (2 loans $31.6 million)

Finance House (1 loan $4.2 million)

First Abu Dhabi Bank (3 loans $240 million)

Gulf International Bank (GIB) (1 loan $38.1 million)

Habib Bank (1 loan $46.3 million)

HDFC Bank (India) (1 loan $5.7 million)

ICICI Bank (4 loans $117 million)

IDBI Bank (India) (2 loans $61.4 million)

Indian Overseas Bank (2 loans $20.7 million)

MUFG Bank (1 loan $74.9 million)

Nabkisan Finance Limited (1 loan $2.1 million)

Nabsamruddhi Finance Limited (1 loan $2.1 million)

National Bank of Umm Al Qaiwain (7 loans $77 million)

NBF Bank (UAE) (5 loans $21 million)

Noor Bank (2 loans $182 million)

Punjab National Bank (3 loans $134.8 million)

State Bank of India (1 loan $50.1 million)

Societe General Bank (1 loan $300.1 million)

South India Bank (1 loan $18.6 million)

Syndicate Bank (India) (1 loan $37.6 million)

Union Bank of India (UBI) (4 loans $80 million)



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United Bank Limited (6 loans $43 million)

UBS (1 loan $25.9 million)

Yes Bank (20 loans $83 million)

231. In 2019, Forbes Magazine estimated Dr. Shetty’s total net worth to be $3.15 billion,

all of which was self-made after a lifetime of hard work. In forty-eight (48) months, the Individual

Defendants fraudulently exposed Dr. Shetty on $4.53 billion in forged guarantees – all in

furtherance of the Defendants’ Ponzi scheme and conspiracy to misappropriate portions of the loan

proceeds.

232. In the course of Dr. Shetty’s investigation into Neopharma’s operations, Dr.

Shetty’s investigators discovered that Kumar and Pra. Manghat with the assistance of select

Neopharma Finance Employees forged Dr. Shetty’s signature on the loan guarantees and brought

those forged personal guarantees to complicit notary publics in the UAE who notarized the

documents outside of the presence of Dr. Shetty and without witnessing whether Dr. Shetty had in

fact signed the documents in question.

233. Given the dire financial condition of the Group Companies caused by the

Defendants who saddled the Group Companies with billions of dollars of debt while they stole

large chunks of the loan proceeds, none of the outstanding loan obligations have been paid by the

Group Companies. Therefore, Dr. Shetty is now being forced to defend against the lenders’

personal guaranty enforcement actions on each of these loans and credit facilities in courts around

the world.

234. Dr. Shetty has already lost over $1.5 billion from his equity holdings in all the

Group Companies. In addition to this tremendous financial injury, Dr. Shetty is now potentially



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exposed personally for at least $4.53 billion in financial obligations he never knew about, much

less to which he ever agreed.

(xi) The Defendants Conspired to Steal the Loan Proceeds Procured Through Their Ponzi Scheme

235. Another goal of the Defendants’ sham supply chain finance activity and asset

inflation was theft of the loan proceeds procured by the Individual Defendants ostensibly on behalf

of the Group Companies. The Individual Defendants’ money-shifting and financial report

manipulation was aimed at creating the illusion that the Group Companies were continuing to grow

so that the stolen funds would go unnoticed.

236. Although money was siphoned off from the Group Companies in many ways, it

was typically done by simply transferring money from the operating accounts of the Group

Companies controlled exclusively by the Individual Defendants. In other instances, the Individual

Defendants created new shadow Baroda accounts for the Group Companies through which the

Defendants then misappropriated the loan proceeds.

237. The Individual Defendants (through the Baroda Executives) also gained illegal

access to one of Dr. Shetty’s personal Baroda accounts even though only Dr. Shetty and his

personal accountant were authorized to access the account. The Individual Defendants used Dr.

Shetty’s personal Baroda account as a conduit to move misappropriated funds into their own

accounts, making it appear as if the money was leaving the Group Companies as payment to Dr.

Shetty. Once in Dr. Shetty’s account, the money was transferred to the Defendants’ accounts at

other banks, and sometimes back to NMC.

238. The misappropriated funds would then be distributed among the Defendants and

their co-conspirators such as the Finance employees at the Group Companies or the Baroda, CEB

and EY employees who participated in the conspiracy. By way of example, a Neopharma Finance



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Employee (Rajendra Kumar) received one hundred eighty-six (186) kickback payments from

August 10, 2015 through March 16, 2020 totaling approximately $4.5 million (AED 16.5 million)

out of Neopharma’s Baroda account (x194) in exchange for his participation in the fraudulent

scheme. Each kickback payment was in round numbers of either AED 50,000 ($13,661) or AED

100,000 ($27,322).

Guide General Contracting & Maintenance Transfers

239. An example of the Defendants’ use of the shadow Baroda Group Companies’

accounts is that of the shadow Baroda account in the name of Guide General Contracting &

Maintenance (i.e., Guide). Although Guide already maintained an operating account at Baroda,

the Individual Defendants opened a shadow account to move portions of the siphoned loan

proceeds that the Defendants would then misappropriate.

240. Dr. Shetty did not authorize the opening of this shadow Guide account and the

account opening forms were forged with his signature.

241. Between 2018 and 2019, based on the limited information retrieved so far by Dr.

Shetty’s investigators and representatives, a total of AED237,981,611.35 (approximately $65

million) was transferred to this shadow Guide bank account from NMC, UAE Exchange Centre,

Neopharma, and Guide (from Guide’s legitimate operating Baroda account).

242. These funds were then distributed as follows:

a. AED42,879,043.81 in transfers to NMC Health Care LLC. These transfers were done, it is suspected, in an apparent attempt to cover up the theft below.

b. AED45,000,000 stolen by Pra. Manghat, through payments from this shadow

Guide account, held at Baroda, directly to Pra. Manghat’s personal Baroda account. Shortly after receiving these funds in his Baroda account, the funds were transferred to an India-based account held at Axis Bank, where the account beneficiaries are listed as both Pra. Manghat and Pro. Manghat.



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c. AED9,000,000 stolen by Prasanth Shenoy (CFO of NMC), through payments from this account directly to his own Baroda account.

d. AED6,000,000 stolen directly by Kumar, through payments from this account

directly to his own Baroda account.

e. AED1,000,000 stolen directly by DeMello, through payments from this account directly to her own Baroda account.

f. AED10,373,120 to various NMC finance department employees in exchange for

their assistance in the Defendants’ fraudulent scheme and conspiracy.

g. AED2,000,000 to UAE Exchange Centre. This transfer was to the UAE Exchange Centre Baroda account (further discussed below), controlled by the Individual Defendants. Thus, it is part of the Individual Defendants’ misappropriation scheme.

243. Upon information and belief, the remainder of the funds, approximately

AED120,000,000 (approximately $33 million), went to the Defendants (CEB, Baroda and EY)

and the Defendants’ other co-conspirators who provided assistance to the Defendants in carrying

out their fraud.

UAE Exchange Centre Transfers

244. Additional examples of transfers to Defendants of the stolen loan proceeds (this

time through a Neopharma Al Masraf account) are illustrated by a Baroda account in the name of

UAE Exchange Centre but that is controlled by the Individual Defendants. The process was

straightforward. Money would be sent to Neopharma’s Al Masraf account by an NMC entity,

routed back to the UAE Exchange Centre account, then sent to the personal accounts of the

Individual Defendants. For example, on October 18, 2016, multiple electronic transfers totaling

approximately (AED) 4,500,000 were deposited into Neopharma’s Al Masraf account. The next

day, October 19, 2016, nine (9) separate withdrawals of exactly AED500,000 each (totaling

AED4,500,000) were made from the UAE Exchange Centre Baroda account and subsequently

transferred to the personal accounts of the Individual Defendants.



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245. This pattern continued from 2017 to 2019, i.e., multiple electronic transfers from

NMC entities would be deposited in Neopharma’s Al Masraf account, then immediately sent to

the UAE Exchange Centre Baroda account. All deposits to the Baroda account would be in large,

round numbers, almost exclusively AED500,000 increments (with one exception).

246. In 2017, twenty-five (25) AED500,000 transfers (and a single 300,000 transfer)

were made from the Neopharma Al Masraf account to the UAE Exchange Centre Baroda account

(totaling AED12,800,000), and subsequently transferred to the personal accounts of the Individual

Defendants.

247. In 2018, twenty-two (22) AED500,000 transfers were made from the Neopharma

Al Masraf account to the UAE Exchange Centre Baroda account (totaling AED11,000,000), and

subsequently transferred to the personal accounts of the Individual Defendants.

248. In 2019, eight (8) AED500,000 transfers were made from the Neopharma Al

Masraf account to the UAE Exchange Centre Baroda account (totaling AED4,000,000), and

subsequently transferred to the personal accounts of the Individual Defendants.

Transfers Through Dr. Shetty’s Personal Baroda Account

249. The Individual Defendants with assistance from the Baroda Executives seized

control of at least one (1) personal bank account of Dr. Shetty (ending x2359) at Baroda even

though the only authorized signatory on this account was Dr. Shetty and his personal accountant

(Joseph Pinto). This enabled the Individual Defendants to transact on one of Dr. Shetty’s own

personal bank account at Baroda.

250. The Individual Defendants used this account as a conduit for the misappropriation

of a portion of the siphoned loan proceeds, diverting some of the money deposited into this account

to themselves and their co-conspirators. The Individual Defendants fraudulently transferred



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AED501,651,180 (approximately $136 million) into this personal account of Dr. Shetty from

Group Company accounts, and then (in many instances) immediately—in the same double-order

instructions to Baroda—out of Dr. Shetty’s personal account to another account. In other words,

the Individual Defendants would, in the same message/instruction, first direct Baroda to transfer

money from a Group Company account held at Baroda to this personal bank account of Dr. Shetty,

also held at Baroda, then immediately transfer that money to another bank account controlled by

the Individual Defendants. The instructions, of course, did not come from Dr. Shetty. The

following are examples of such transactions:

a. On March 19, 2017, the Individual Defendants once again directed Baroda to first transfer AED2,000,000 from a NMC account held at Baroda, to Dr. Shetty’s personal account, then after that was complete, immediately transfer that money to the UAE Exchange Centre Baroda account.

b. On July 3, 2017, the Individual Defendants directed Baroda to first transfer

AED5,000,000 from a NMC account held at Baroda, to Dr. Shetty’s personal account, then after that was complete, immediately transfer that money to a UAE Exchange Centre Account, which was a UAE Exchange Centre Baroda account controlled by the Individual Defendants.

c. On October 24, 2017, the Individual Defendants directed Baroda to first transfer

AED3,000,100 from a NMC account held at Baroda, to Dr. Shetty’s personal account, then after that was complete, immediately transfer that money to a Zeino Pharma/Therapeutics account. Upon information and belief, this account/entity is owned or controlled by the Individual Defendants, as Dr. Shetty has no connection to this company whatsoever. Also, this is an entity that appears on a number of fake invoices tied to the roundtripping/channel stuffing scheme.

d. On November 23, 2017, the Individual Defendants again directed Baroda to first

transfer (this time) AED2,000,100 from a NMC account held at Baroda, to Dr. Shetty’s personal account, then after that was complete, immediately transfer that money to a Zeino Pharma/Therapeutics account.

e. On December 17, 2017, the Individual Defendants again directed Baroda to first

transfer (this time) AED3,000,100 from a NMC account held at Baroda, to Dr. Shetty’s personal account, then after that was complete, immediately transfer that money to a Zeino Pharma/Therapeutics account.



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f. On December 21, 2017, the Individual Defendants again directed Baroda to first transfer (this time) AED3,000,100 from a NMC account held at Baroda, to Dr. Shetty’s personal account, then after that was complete, immediately transfer that money to a Zeino Pharma/Therapeutics account.

g. On December 23, 2017, the Individual Defendants again directed Baroda to first transfer (this time) AED1,700,00 from a NMC account held at Baroda, to Dr. Shetty’s personal account, then after that was complete, immediately transfer that money to a Zeino Pharma/Therapeutics account.

Individual Defendants’ Transfers Through a Fraudulent Account at National Bank of Fujairah

251. As shown above, the Individual Defendants were successful (with assistance

received from the Baroda Executives) in commandeering one of Dr. Shetty’s existing personal

accounts at Baroda.

252. The Individual Defendants also successfully opened an account with National Bank

of Fujairah (“NBF”) in Abu Dhabi, UAE that purported to be Dr. Shetty’s personal account.

253. The NBF account was opened in December 2017 by Arlay Edwin, then UAE

Exchange Centre’s Director of Corporate Banking Relations, while Pro. Manghat was CEO of

UAE Exchange Centre. Dr. Shetty had no knowledge of this account until he discovered its

existence during his own investigation into Neopharma in 2020.

254. Dr. Shetty’s name was forged on the NBF account opening materials, which

delegated all authority over the account to Pro. Manghat and his close associate at UAE Exchange

Centre, Pradeep Kumar. In March 2020, following inquires made by Dr. Shetty and his legal

representatives, NBF confirmed (after performing its own investigation) that Dr. Shetty’s

purported “personal” account at NBF was fraudulently opened by Pro. Manghat and Pra. Manghat

and their UAE Exchange employee co-conspirators.

255. Just like Dr. Shetty’s personal Baroda account (x2359) and the shadow Guide



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account, the Manghat Brothers used this account to make it appear as if the Group Companies

were providing money to Dr. Shetty to either compensate him directly or to pay down debt

obligations to him in furtherance of their scheme to inflate the Group Companies’ financials. In

reality, the Manghat Brothers were using the NBF account to pay kickbacks to other conspirators

who were assisting them in concealing the magnitude of the Defendants’ fraud. By paying the

kickbacks from a non-Group Company account (i.e., a fraudulently opened account in the name

of Dr. Shetty), the Manghat Brothers sought to conceal the identities of some of the conspirators

who were assisting the Defendants in executing on their fraudulent scheme.

256. From December 2017 until December 2019, the NBF account received more than

AED 900 million ($245 million) from various Group Companies including NMC, Neopharma,

and UAE Exchange Centre. Once the funds were deposited in the NBF account, the Manghat

Brothers immediately transferred the funds (often in identical amounts) to themselves and to their

co-conspirators at the Group Companies.

257. For example, Pro. Manghat paid himself AED 7.4 million ($2 million) out of the

NBF account and paid the Manghat Brothers’ co-conspirators at UAE Exchange Centre Pradeep

Kumar AED 6.3 million ($1.7 million) and Arlay Edwin AED 3.6 million ($1 million) for their

participation in inflating the Group Companies’ financials and the fraudulent opening of the NBF

account.

258. Pra. Manghat used the NBF account to pay AED 5 million ($1.36 million) in

kickbacks to Rahul Ranjit, CFO of Finablr, the parent company of UAE Exchange Centre to assist

the Defendants in concealing their fraudulent scheme. But, by far the biggest beneficiary of

payments from the NBF account was NMC’s and Finablr’s Board Member Abdul Rahman



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Basaddiq (“Basaddiq”). In total, Bassadiq received AED 11.1 million ($3 million) in kickback

payments from the Manghat Brothers out of the NBF account.

259. Basaddiq assisted the Defendants in concealing their fraudulent scheme. Basaddiq

spent twenty-five (25) years with EY, fifteen (15) of those as an equity partner, conducting and

overseeing large corporate audits in the United Kingdom and the Persian Gulf region. During his

tenure with EY, Basaddiq served as the Managing Partner of EY’s Abu Dhabi office, in addition

to his responsibilities as UAE Country Partner in charge, which included oversight of the Group

Companies’ accounts with EY.

260. Basaddiq was appointed to the NMC Board in February 2014, which coincided with

Pra. Manghat becoming an Executive Director of NMC. Given Basaddiq’s vast experience with

corporate audits at EY, Dr. Shetty believed that Basaddiq would provide a strong financial

oversight presence to the NMC Board.

261. Pra. Manghat induced Basaddiq to refrain from questioning the integrity of the EY

audited financial statements for the Group Companies, including NMC and Finablr by offering

and paying Basaddiq kickback payments for his cooperation and silence. The Manghat Brothers

paid Basaddiq twenty-three (23) separate kickback payments between May 9, 2018 and February

9, 2020 from the NBF account alone totaling $3 million. The last kickback payment (February 9,

2020) was made just eighteen (18) days before Pra. Manghat was terminated as CEO of NMC, and

exactly one (1) week before Basaddiq resigned as director of both NMC and Finablr.

Misappropriation Through A Company Owned By Defendant Nandiraju 262. In the course of his investigation, Dr. Shetty discovered another transaction in

which Dr. Shetty unbeknownst to him had been defrauded of additional funds – this time by

Defendant Nandiraju and his wife. On or about January 22, 2018, Dr. Shetty purportedly agreed



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to provide a loan in the amount of INR120,000,000 (Indian Rupees) (approximately $1.9 million)

to Clinsync Clinical Research Private Limited (“Clinsync”), a drug research and developer owned

by defendant Nandiraju’s wife. Dr. Shetty’s (un-notarized) signature is forged on the loan

documentation.

263. To fund the loan, the Individual Defendants first withdrew funds from

Neopharma’s operating account held at Baroda and transferred them to Dr. Shetty’s personal

Baroda account. The Individual Defendants recorded the transfer in Neopharma’s books and

records as Dr. Shetty drawing down on his Neopharma shareholder loan. The Individual

Defendants then instructed Baroda to immediately transfer the funds from Dr. Shetty’s personal

Baroda account to Clinsync’s account at ICICI Bank.

264. In order to misappropriate the funds, the Individual Defendants elicited the help of

the Baroda Executives. Ultimately, the Individual Defendants, in seven (7) separate transactions,

transferred INR124,000,000 from Neopharma, to Clinsync—through Dr. Shetty’s personal

account—under the auspices of this purported loan. Each of these seven (7) double-transfer orders,

collectively totaling INR124,000,00 ($1.9 million), were done through instructions directly to the

Baroda UAE Executives as follows:

a. On or about March 8, 2018, through a letter to the “Manager” of Baroda’s relevant Abu Dhabi branch (i.e., the Baroda Executives at that branch) bearing a forged electronic signature of Dr. Shetty, the Individual Defendants instructed Baroda to transfer AED963,100 from a Neopharma account held at Baroda to Dr. Shetty’s personal Baroda account (ending x2359);

b. In the same transmission, but in a separately forged letter of the same date (March 8, 2018), the Individual Defendants instructed Baroda to transfer that money (INR17,000,000) from Dr. Shetty’s personal account to Clinsync’s account at ICICI Bank;

c. On or about March 13, 2018, through a letter to the “Manager” of Baroda’s relevant Abu Dhabi branch (i.e., the Baroda Executives at that branch) bearing a forged electronic signature of Dr. Shetty, the Individual Defendants instructed Baroda to



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transfer AED850,000 from a Neopharma account held at Baroda to Dr. Shetty’s personal Baroda account (ending x2359);

d. In the same transmission, but in a separately forged letter of the same date (March 13, 2018), the Individual Defendants instructed Baroda to transfer that money (INR15,000,000) from Dr. Shetty’s personal account to Clinsync’s account at ICICI Bank;

e. On or about April 9, 2018, through a letter to the “Manager” of Baroda’s relevant Abu Dhabi branch (i.e., the Baroda Executives at that branch) bearing a forged electronic signature of Dr. Shetty, the Individual Defendants instructed Baroda to transfer AED1,134,100 from a Neopharma account held at Baroda to Dr. Shetty’s personal Baroda account (ending x2359);

f. In the same transmission, but in a separately forged letter of the same date (April 9, 2018), the Individual Defendants instructed Baroda to transfer that money (INR20,000,000) from Dr. Shetty’s personal account to Clinsync’s account at ICICI Bank;

g. On or about May 2, 2018, through a letter to the “Manager” of Baroda’s relevant Abu Dhabi branch (i.e., the Baroda Executives at that branch) bearing a forged electronic signature of Dr. Shetty, the Individual Defendants instructed Baroda to transfer AED850,000 from a Neopharma account held at Baroda to Dr. Shetty’s personal Baroda account (ending x2359);

h. In the same transmission, but in a separately forged letter of the same date (May 2, 2018), the Individual Defendants instructed Baroda to transfer that money (INR15,000,000) from Dr. Shetty’s personal account to Clinsync’s account at ICICI Bank;

i. On or about May 20, 2018, through a letter to the “Manager” of Baroda’s relevant Abu Dhabi branch (i.e., the Baroda Executives at that branch) bearing a forged electronic signature of Dr. Shetty, the Individual Defendants instructed Baroda to transfer AED379,500 from a Neopharma account held at Baroda to Dr. Shetty’s personal Baroda account (ending x2359);

j. In the same transmission, but in a separately forged letter of the same date (May 20, 2018), the Individual Defendants instructed Baroda to transfer that money (INR7,000,000) from Dr. Shetty’s personal account to Clinsync’s account at ICICI Bank;

k. On or about May 27, 2018, through a letter to the “Manager” of Baroda’s relevant Abu Dhabi branch (i.e., the Baroda Executives at that branch) bearing a forged electronic signature of Dr. Shetty, the Individual Defendants instructed Baroda to transfer AED815,300 from a Neopharma account held at Baroda to Dr. Shetty’s personal Baroda account (ending x2359);

l. In the same transmission, but in a separately forged letter of the same date (March 13, 2018), the Individual Defendants instructed Baroda to transfer that money (INR15,000,000) from Dr. Shetty’s personal account to Clinsync’s account at ICICI Bank; and



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m. On or about June 8, 2018, through a letter to the “Manager” of Baroda’s relevant

Abu Dhabi branch (i.e., the Baroda Executives at that branch) bearing a forged electronic signature of Dr. Shetty, the Individual Defendants instructed Baroda to transfer AED1,920,000 from a Neopharma account held at Baroda to Dr. Shetty’s personal Baroda account (ending x2359);

n. In the same transmission, but in a separately forged letter of the same date (June 8, 2018), the Individual Defendants instructed Baroda to transfer that money (INR35,000,000) from Dr. Shetty’s personal account to Clinsync’s account at ICICI Bank.

265. Each of the fourteen (14) instruction letters to the Baroda Executives contained

exactly the same electronic signature purportedly from Dr. Shetty. As with all the other highly

suspicious transactions that were processed by Baroda without any investigation or AML reporting

to bank regulators, the Baroda Executives ensured that the transactions were processed in

furtherance of the Defendants’ conspiracy.

266. The terms of this generous (unsecured) loan do not call for the repayment of any

principal until 2025. Upon discovering this fraudulent loan, Dr. Shetty has called for its immediate

repayment, but his demands have gone unanswered.

(xii) Damages Dr. Shetty

267. Dr. Shetty has suffered substantial financial injury. He has lost over $1.5 billion in

damages from his interests in NMC and the Group Companies, which the Defendants have

financially ruined by saddling the companies with multi-billion dollar (USD) liabilities and debt.

In addition, Dr. Shetty is personally exposed and defending against a number of lawsuits in which

the lenders are seeking to enforce the forged personal guarantees against Dr. Shetty in an amount

totaling approximately $4.53 billion. Finally, Dr. Shetty has suffered acute reputational injury as

a result of the Defendants’ tortious conduct that has had a severe adverse impact on all his other



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business ventures separate and apart from the Group Companies in an amount not less than $1

billion.

Neopharma

268. Due to the enormous fraud perpetrated by the Defendants, Neopharma and Nexgen

have ceased all meaningful business operations. Neopharma has experienced a complete

diminution of value in an amount not less than $500 million. Nexgen, has also experienced a

complete diminution of value in an amount not less than $200 million of which fifty percent (50%)

of Nexgen’s losses have been sustained by Neopharma directly. In addition, due to the fraudulent

loans taken out in Neopharma’s and Nexgen’s name, but for which Neopharma and Nexgen

received no financial benefit, the companies have exposure as “borrowers” in an amount of $427

million (Neopharma) and $45 million (Nexgen) and are already defending against enforcement

actions in various forums. Neopharma has borne all of Nexgen’s costs and expenses associated

with these enforcement actions.

COUNT I

CIVIL CONSPIRACY (against all Defendants by Dr. Shetty and Neopharma)

269. Plaintiffs repeat and reallege each and every allegation in the preceding paragraphs

of this Complaint as if fully set forth herein and below.

270. The Defendants agreed to form a conspiracy to create false transactions, launder

the proceeds of these false transactions, and then steal the laundered proceeds at the expense of the

Plaintiffs. Specifically, Defendants reached an agreement and conspired to carry out a fraudulent

scheme to use Dr. Shetty’s reputation and the businesses he built over his career to enrich

themselves at the expense of Plaintiffs. With the assistance of their co-conspirators, the Individual

Defendants intentionally and fraudulently inflated the Group Companies’ financial statements,



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including NMC, to increase the NMC share price and procure sizable loans and credit facilities for

fake transactions. Defendants then misappropriated the fraudulently obtained proceeds from the

loans and credit facilities, while saddling the Group Companies with massive debt and Dr. Shetty

with personal guaranty claims by the lenders making the bogus loans.

271. Defendants acted in concert in furtherance of their common plan.

272. Defendants’ conspiracy in furtherance of their fraudulent scheme saddled the

Group Companies with debilitating multi-billion dollars of debt that have proximately caused

substantial damages to Dr. Shetty, Neopharma and Nexgen (of which 50% of the damages were

sustained by Nexgen’s owner Neopharma) in an amount to be determined at trial but presently

believed to be in excess of $8 billion. Defendants’ conspiracy renders them all subject to personal

jurisdiction in New York and joint and several liability for Plaintiffs’ damages.

COUNT II

FRAUD (against all Defendants by Dr. Shetty)



274. Each of the Defendants engaged in affirmative misrepresentations and/or acts of

concealment as to Dr. Shetty.

275. At all relevant times, the Individual Defendants managed the Group Companies

and were in a relationship of trust and confidence with Dr. Shetty. Each of the Individual

Defendants owed Dr. Shetty fiduciary duties by virtue of his status as an owner in each of the

relevant Group Companies.

276. Each of the Individual Defendants had an affirmative obligation to disclose the

fraud that they were perpetuating for six years (2013 – 2019) to Dr. Shetty, including but not



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limited to the fact that they were inflating the Group Companies’ financials and forging Dr.

Shetty’s signatures on purported personal guarantees to fraudulently obtain loans.

277. The Individual Defendants, with the assistance of their co-conspirators, including

EY, intentionally and knowingly misrepresented to Dr. Shetty that the Group Companies were in

sound financial condition.

278. Individual Defendants and EY delivered to Dr. Shetty fraudulent audited financials

every year from 2013 to 2019 for each Group Company. By way of example, Dr. Shetty received

from both EY and Kumar audited financial statements for Neopharma on September 28, 2017

(Year ending 2016), November 5, 2018 (Year ending 2017) and December 5, 2019 (Year ending

2018 and 1st quarter 2019).

279. Dr. Shetty justifiably relied on the Individual Defendants’ misrepresentations and

acts of concealment/non-disclosure.

280. The Individual Defendants’ fraudulent conduct has proximately caused Dr. Shetty

damages in an amount to be determined at trial.

281. EY owed fiduciary duties to Dr. Shetty as a substantial owner of all the Group

Companies for which EY served as the auditor. As a result, EY had a duty to disclose the

fraudulent scheme in which it was participating and to disclose to Dr. Shetty that the Group

Companies’ financials that EY certified as true and accurate were in fact inflated and fraudulent.

282. Separately, having participated in the fraud by concealing the Group Companies’

inflated financials, the roundtripping scheme and the loan misappropriation scheme, EY had a duty

to correct its previous misrepresentations concerning the accuracy of the Group Companies’

financial statements, which EY knew and intended for Dr. Shetty to rely upon.



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283. Dr. Shetty, in his capacity as an NMC Board Member and substantial owner of all

the Group Companies did rely on EY’s misrepresentations concerning the accuracy of the Group

Companies’ financial statements.

284. Dr. Shetty justifiably relied on the audited financial statements certified by EY for

all of the Group Companies over the six-year period of time (2013 – 2019).

285. EY’s fraudulent conduct proximately caused Dr. Shetty damages in an amount to

be determined at trial.

286. Baroda owed fiduciary duties to Dr. Shetty based on Dr. Shetty maintaining both

personal and business bank accounts with Baroda. As a result, Baroda owed a duty to disclose the

fraudulent scheme in which Baroda was participating.

287. Separately, having participated in the fraud by transacting the roundtripping and

misappropriation schemes, Baroda had a duty to disclose to Dr. Shetty that its actions were setting

him up for substantial losses from the collapse of the Group Companies and the numerous forged

personal guarantees tied to the fraudulently procured loans, including those issued by Baroda.

288. Dr. Shetty justifiably relied on Baroda’s actions and inactions, including by

maintaining personal and business bank accounts with Baroda even though Baroda enabled the

Individual Defendants to roundtrip fraudulent transactions through those accounts that proximately

caused Dr. Shetty damages in an amount to be determined at trial.

289. CEB owed a duty to disclose to Dr. Shetty its role in the Defendants’ conspiracy

and fraudulent scheme. CEB knew that the Defendants were engaging in a fraudulent scheme to

inflate the Group Companies’ financials. Nevertheless, CEB participated in the fraud with the

knowledge and intent that by providing purported supply chain financing in respect of fictitious

invoices, it was causing the Group Companies’ financials to be fraudulently inflated.



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290. Nevertheless, CEB participated in the Defendants’ fraudulent scheme and never

disclosed the particulars of the fraud to Dr. Shetty.

291. Dr. Shetty justifiably relied on CEB’s fraudulent conduct and acts of concealment,

which proximately caused him damages in an amount to be determined at trial.

COUNT III

FRAUD (against Pra. Manghat, Kumar, Nandiraju, EY, Baroda and CEB

by Neopharma)



293. At all relevant times, by virtue of their corporate positions, Kumar, Nandiraju and

Pra. Manghat managed the day-to-day operations of Neopharma. Accordingly, Kumar, Nandiraju

and Pra. Manghat were in a relationship of trust and confidence with Neopharma and its owners,

including Dr. Shetty.

294. Kumar, Nandiraju, and Pra. Manghat each participated in creating false financial

reports and concocting fake transactions as part of the scheme to load Neopharma with loan debt

and steal the proceeds of the loans.

295. Kumar, Nandiraju and Pra. Manghat each had an affirmative obligation to disclose

the fraud that they were perpetuating for six years (2013 – 2019) to Neopharma, including but not

limited to the fact that they were inflating Neopharma’s financials through the Defendants’

roundtripping scheme and procuring fraudulent loans ostensibly on behalf of Neopharma but for

which Neopharma received no financial benefit and saddling Neopharma with the loan repayment

obligations.



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296. Instead, of disclosing their fraud, Kumar, Nandiraju and Pra. Manghat continued to

misrepresent to Neopharma that it was in sound financial condition.

297. Neopharma (through its owners) justifiably relied on Kumar, Nandiraju and Pra.

Manghat’s misrepresentations and acts of concealment/non-disclosure.

298. Kumar, Nandiraju and Pra. Manghat’s fraudulent conduct have proximately caused

Neopharma damages in an amount to be determined at trial.

299. At all relevant times, by virtue of their corporate positions, Nandiraju and Pra.

Manghat managed the day-to-day operations of Nexgen. Accordingly, Nandiraju and Pra.

Manghat were in a relationship of trust and confidence vis-à-vis Nexgen (and its owners, including

Neopharma).

300. Nandiraju and Pra. Manghat each participated in creating false financial reports and

concocting fake transactions as part of the scheme to load Nexgen with loan debt and steal the

proceeds of the loans.

301. Nandiraju and Pra. Manghat each had an affirmative obligation to disclose the fraud

that they were perpetuating for six years (2013 – 2019) to Nexgen, including but not limited to the

fact that they were inflating Nexgen’s financials through the Defendants’ roundtripping scheme

and procuring fraudulent loans ostensibly on behalf of Nexgen but for which Nexgen received no

financial benefit yet saddling Nexgen with the loan repayment obligations.

302. Instead, of disclosing their fraud, Nandiraju and Pra. Manghat continued to

misrepresent to Nexgen (and its owners such as Neopharma) that it was in sound financial

condition. Nexgen (through its owners) justifiably relied on Nandiraju’s and Pra. Manghat’s

misrepresentations and acts of concealment/nondisclosure.



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303. Nandiraju’s and Pra. Manghat’s fraudulent conduct have proximately caused

Nexgen damages in an amount to be determined at trial of which Neopharma sustained fifty

percent (50%) of Nexgen’s total damages.

304. EY owed fiduciary duties to Neopharma as its auditor. As a result, EY had a duty

to disclose the fraudulent scheme in which it was participating and to disclose to Neopharma that

the financials that EY certified as true and accurate were in fact inflated and fraudulent.

305. Separately, having participated in the fraud by concealing Neopharma’s inflated

financials, the roundtripping scheme and the loan misappropriation scheme, EY had a duty to

correct its previous misrepresentations concerning the accuracy of Neopharma’s financial

statements, which EY knew and intended for Neopharma to rely upon.

306. Neopharma relied on EY’s misrepresentations concerning the accuracy of its

financial statements.

307. Neopharma justifiably relied on the audited financial statements that EY certified

to be true and accurate for the relevant six-year period of time (2013 – 2019).

308. EY’s fraudulent conduct proximately caused Neopharma damages in an amount to

be determined at trial.

309. Baroda owed fiduciary duties to Neopharma and Nexgen by virtue of the companies

being account holders with Baroda. As a result, Baroda owed a duty to disclose the fraudulent

scheme in which Baroda was participating.

310. Separately, having participated in the fraud by transacting the roundtripping and

misappropriation schemes, Baroda had a duty to disclose to Neopharma and Nexgen that their

actions were setting Neopharma and Nexgen up for substantial losses based on the roundtripping



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and fraudulently procured loans that left Neopharma and Nexgen with substantial purported loan

repayment obligations.

311. Neopharma and Nexgen justifiably relied on Baroda’s actions and inactions,

including by continuing to maintain bank accounts with Baroda even though Baroda enabled the

Individual Defendants to roundtrip fraudulent transactions through those accounts that proximately

caused Neopharma and Nexgen damages in an amount to be determined at trial. Nexgen’s losses

flowed to its owners, including Neopharma which sustained fifty percent (50%) of Nexgen’s

damages.

312. CEB owed a duty to disclose to Neopharma and Nexgen its role in the Defendants’

conspiracy and fraudulent scheme. CEB knew that the Defendants were engaging in a fraudulent

scheme to inflate the Group Companies’ financials, including those of Neopharma and Nexgen.

Nevertheless, CEB participated in the fraud with the knowledge and intent that by providing

purported supply chain financing in respect of fictitious invoices, it was causing Neopharma’s and

Nexgen’s financials to be fraudulently inflated.

313. Nevertheless, CEB participated in the Defendants’ fraudulent scheme and never

disclosed the particulars of the fraud to Neopharma and Nexgen.

314. Neopharma and Nexgen justifiably relied on CEB’s fraudulent conduct and acts of

concealment, which proximately caused both companies damages in an amount to be determined

at trial. Neopharma sustained fifty percent (50%) of Nexgen’s damages by virtue of its co-majority

ownership interest in Nexgen,



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COUNT IV

AIDING and ABETTING FRAUD (against Baroda by Dr. Shetty and Neopharma)



316. As set forth in the preceding Counts, the Individual Defendants have committed

fraud against Dr. Shetty, Neopharma and Nexgen.

317. Baroda knew that the Individual Defendants were committing fraud against Dr.

Shetty, Neopharma and Nexgen because the Individual Defendants solicited and obtained

Baroda’s assistance to perpetuate their roundtripping scheme to inflate the Group Companies’

financials, including Neopharma and Nexgen which ultimately caused the collapse of all the Group

Companies under the weight of the undisclosed and fraudulently procured loans. Moreover,

Baroda was aware by virtue of its transaction monitoring obligations over its account holders that

a large percentage of the fraudulent transactions ran exclusively through the Neopharma and

Nexgen accounts at Baroda, and nearly every penny that came into the Neopharma and Nexgen

Baroda accounts was immediately withdrawn and transferred to another Group Company Baroda

account – conduct that is consistent with money laundering and not legitimate business activity.

318. Baroda substantially assisted the Individual Defendants’ fraud against Dr. Shetty,

Neopharma and Nexgen by clearing all of the roundtripping transactions, facilitating the opening

and maintenance of the shadow Baroda accounts in the names of the Group Companies but that

were exclusively controlled by the Individual Defendants, and processing the fraudulent transfer

requests that moved the loan proceeds from the Group Companies’ operating accounts at Baroda

to either the conspirators’ accounts or to the shadow Baroda accounts in the names of the Group

Companies. In addition, Baroda itself extended nine fraudulent loans to the Group Companies and



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accepted seven forged personal guarantees in the name of Dr. Shetty. Indeed, the Individual

Defendants’ fraudulent enterprise would not have been possible without Baroda.

319. Accordingly, Baroda’s actions have proximately caused damages to Dr. Shetty,

Neopharma and Nexgen (of which Neopharma sustained fifty percent (50%) of Nexgen’s total

financial injury) in an amount to be determined at trial.

COUNT V

AIDING and ABETTING FRAUD (against EY by Dr. Shetty and Neopharma)




fraud against the Plaintiffs.

322. EY knew that the Individual Defendants were committing fraud against the

Plaintiffs because it was the auditor to Neopharma as well as the other Group Companies and

therefore had access to all of the companies’ books and records. Moreover, the Individual

Defendants disclosed to EY their intentions and solicited EY’s assistance in concealing their fraud.

323. EY substantially assisted the Individual Defendants’ fraud by advising the

Individual Defendants on how to overstate the Group Companies’ financials. Moreover, EY

provided substantial assistance by concealing the roundtripping activity and loan misappropriation

schemes, which prevented Dr. Shetty, Neopharma and the other Group Companies from timely

discovering the fraud and taking action to prevent further financial injury to themselves.

324. Accordingly, EY’s actions have proximately caused damages to Dr. Shetty,

Neopharma and Nexgen (of which fifty percent (50%) of Nexgen’s financial injury was sustained

by Neopharma) in an amount to be determined at trial.



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COUNT VI

AIDING and ABETTING FRAUD (against CEB by Dr. Shetty and Neopharma)




fraud against the Plaintiffs.

327. CEB knew that the Individual Defendants were committing fraud against the

Plaintiffs because the Individual Defendants disclosed to CEB their intentions and fraudulent

scheme when they solicited CEB to provide supply chain financing in respect of the fictitious

invoices generated by the Individual Defendants to facilitate the roundtripping scheme.

328. CEB substantially assisted the Individual Defendants’ fraud by entering into a

credit facility with NMC in which CEB provided $200 million in supply chain financing in respect

of fictitious invoices intended to start and then perpetuate a pervasive roundtripping scheme to

inflate the Group Companies’ financials, including those of Neopharma and Nexgen.

329. Accordingly, CEB’s actions have proximately caused damages to Dr. Shetty,

Neopharma and Nexgen (of which Neopharma sustained fifty percent (50%) of Nexgen’s total

damages) in an amount to be determined at trial.

COUNT VII

BREACH of FIDUCIARY DUTY (against Individual Defendants, Baroda and EY by Dr. Shetty)





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331. At all times relevant to this claim, the Individual Defendants held senior corporate

positions at the Group Companies. Dr. Shetty was the single largest owner in all the Group

Companies in issue (with the exception of NMC in which he was the second largest shareholder).

The Individual Defendants owed fiduciary duties to act in the best interests of the Group

Companies and their owners, including Dr. Shetty.

332. Instead of faithfully discharging their fiduciary duties owed to Dr. Shetty, the

Individual Defendants engaged in a fraudulent scheme with the intent of enriching themselves to

the detriment of the Group Companies and Dr. Shetty. Indeed, the Individual Defendants’ conduct

has proximately caused substantial financial injury to the Group Companies and to their owner Dr.

Shetty in an amount to be determined at trial.

333. Baroda also owed fiduciary duties to Dr. Shetty by virtue of Dr. Shetty maintaining

personal and business bank accounts with Baroda, which Baroda breached by participating in the

fraudulent scheme whereby Baroda cleared the illicit roundtripping transactions and facilitated the

transfers of the siphoned loan proceeds from the Group Companies’ operating Baroda accounts to

the conspirators’ accounts or to the shadow Baroda accounts from which Baroda and the other

Defendants then misappropriated those siphoned funds. Baroda’s misconduct has proximately

caused substantial damages to Dr. Shetty in an amount to be determined at trial.

334. EY owed fiduciary duties to Dr. Shetty by virtue of his substantial ownership

interests in the Group Companies for which EY served as auditor. EY breached its fiduciary duties

by failing to perform honest and arms-length audits for the Group Companies and instead

participating in the Defendants’ fraudulent scheme. EY’s actions have proximately caused

substantial damages to Dr. Shetty in an amount to be determined at trial.



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COUNT VIII

BREACH of FIDUCIARY DUTY (against Pra. Manghat, Nandiraju and Kumar by Neopharma)



336. At all times relevant to this claim, Pra. Manghat was the registered manager for

Nexgen and was responsible for its day-to-day operations and therefore owed a fiduciary duty to

Nexgen.

337. Nandiraju was a Director of Nexgen and, therefore, owed fiducuary duties to

Nexgen.

338. Pra. Manghat and Nandiraju breached their fiduciary duties to Nexgen by designing

and participating in the Defendants’ fraudulent scheme to inflate Nexgen’s financial statements

through the pervasive use of roundtripping transactions and then saddling Nexgen with loan

repayment obligations attributable to loans for which Nexgen received no financial benefit.

339. Nexgen has suffered damages as a result of Pra. Manghat’s and Nandiraju’s actions

in an amount to be determined at trial and of which Neopharma has sustained 50% of Nexgen’s

total damages by virtue of its co-majority ownership in Nexgen.

340. Kumar and Nandiraju were the CFO and Deputy CEO respectively of Neopharma.

By virtue of their senior management positions at Neopharma, Kumar and Nandiraju owed

fiduciary duties to Neopharma.

341. Kumar and Nandiraju breached their fiduciary duties to Neopharma by designing

and participating in the Defendants’ fraudulent scheme to inflate Neopharma’s financial statements

through the pervasive use of roundtripping transactions and then saddling Neopharma with loan

repayment obligations attributable to loans for which Neopharma received no financial benefit.



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342. Neopharma has suffered damages as a result of Kumar’s and Nandiraju’s actions

in an amount to be determined at trial.

COUNT IX

BREACH of FIDUCIARY DUTY (against EY & Baroda by Neopharma)



344. EY owed fiduciary duties to Neopharma as the company’s auditor. EY’s fiduciary

duties included performing audits in conformance with the appropriate professional standards of

care and acting in the best interests of Neopharma. EY breached its fiduciary duties by

participating in the Defendants’ fraudulent scheme and actively concealing the Defendants’

roundtripping activities and conspiracy to inflate Neopharma’s financials (and those of the other

Group Companies).

345. EY’s conduct has proximately caused Neopharma damages in an amount to be

determined at trial.

346. Baroda owed fiduciary duties to Neopharma and Nexgen by virtue of both

companies maintaining bank accounts with Baroda.

347. Baroda breached its fiduciary duties owed to Neopharma and Nexgen by clearing

patently fraudulent roundtripping transactions in furtherance of the Defendants’ conspiracy to

inflate the Group Companies’ financials, including those of Neopharma and Nexgen, which caused

the financial collapse of both companies.

348. Baroda’s conduct has proximately caused Neopharma and Nexgen damages in an

amount to be determined at trial. Neopharma has sustained fifty percent (50%) of Nexgen’s total

damages by virtue of its co-majority ownership interest in Nexgen.



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COUNT X

AIDING and ABETTING BREACH of FIDUCIARY DUTY (against Baroda & EY by Neopharma and Dr. Shetty)



350. As set forth in the preceding Counts, Kumar and Nandiraju by virtue of their senior

corporate positions breached their respective fiduciary duties to Neopharma.

351. Moreover, Pra. Manghat and Nandiraju breached their fiduciary duties owed to

Nexgen by virtue of their corporate positions at the company as set forth in the preceding Counts.

352. Baroda knew that Kumar, Nandiraju and Pra. Manghat were breaching their

respective fiduciary duties to Neopharma and Nexgen because the Individual Defendants disclosed

their fraudulent scheme and solicited Baroda’s assistance in executing on the roundtripping and

loan misappropriation schemes.

353. Baroda substantially assisted Kumar, Nandiraju and Pra. Manghat by clearing the

transactions throughout the six-year duration of the conspiracy and assisting the Individual

Defendants to transfer the siphoned funds to the conspirators’ accounts and to open the shadow

Baroda accounts in the names of the Group Companies that were then used by the Defendants to

misappropriate the siphoned loan proceeds.

354. As a result of Baroda’s actions, Neopharma and Nexgen have sustained damages

in an amount to be determined at trial. Neopharma has sustained fifty percent (50%) of Nexgen’s

total damages by virtue of its co-majority ownership interest in Nexgen.

355. The Individual Defendants also breached their fiduciary duties owed to Dr. Shetty

as set forth in the preceding Counts.



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356. Baroda knew that the Individual Defendants were breaching their respective

fiduciary duties to Dr. Shetty because the Individual Defendants disclosed their fraudulent scheme

and solicited Baroda’s assistance in executing on the roundtripping and loan misappropriation

schemes.

357. Baroda substantially assisted the Individual Defendants in breaching their fiduciary

duties by clearing the fraudulent and roundtripped transactions throughout the six-year duration of

the conspiracy. Moreover, Baroda provided substantial assistance to the Individual Defendants by

processing the transfers of siphoned loan proceeds from the Group Companies’ operating accounts

into the conspirators’ accounts and assisting the Individual Defendants to open shadow Baroda

accounts in the names of the Group Companies, which the Individual Defendants controlled and

used to misappropriate the siphoned loan proceeds among the Defendants and their conspirators.

Baroda also provided the Individual Defendants with substantial assistance in breaching their

fiduciary duties by giving the Individual Defendants access to one of Dr. Shetty’s personal Baroda

accounts, which the Individual Defendants used to launder payments made in furtherance of the

Defendants’ fraudulent scheme.

358. EY knew that Kumar, Nandiraju and Pra. Manghat were breaching their respective

fiduciary duties to Neopharma because EY was the auditor for the company, which provided EY

with inside knowledge of the pervasive accounting fraud that the Individual Defendants were

perpetuating at the Group Companies, including Neopharma. Moreover, the Individual Defendants

disclosed their fraudulent scheme and enlisted EY’s assistance in concealing the accounting fraud

at the Group Companies, including Neopharma. EY provided substantial assistance to Kumar,

Nandiraju and Pra. Manghat’s breaches of fiduciary duties by assisting them to inflate



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Neopharma’s and the Group Companies’ financial statements and by concealing the fraudulent

scheme for the entirety of the Defendants’ six-year conspiracy.

359. As a result of EY’s actions, Neopharma has sustained damages in an amount to be


360. EY also knew that the Individual Defendants were breaching their fiduciary duties

to Dr. Shetty because EY was the auditor to the Group Companies and had access to the internal

books and records of the Group Companies, which evidenced the fraudulent inflation of the Group

Companies’ financials and the purported adjustments to Dr. Shetty’s shareholder loan accounts

with the Group Companies. Moreover, the Individual Defendants disclosed their fraudulent

scheme and enlisted EY’s assistance in concealing the accounting fraud at the Group Companies.

Therefore, EY knew that the Individual Defendants were breaching their fiduciary duties to Dr.

Shetty and that their conduct would cause Dr. Shetty financial injury.

361. EY provided substantial assistance to the Individual Defendants by assisting them

to inflate the Group Companies’ financial statements and by concealing the fraudulent scheme for

the entirety of the Defendants’ six-year conspiracy.

362. As a result of EY’s actions, Dr. Shetty has sustained damages in an amount to be


COUNT XI

UNJUST ENRICHMENT (against all the Defendants by Dr. Shetty and Neopharma)





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364. By their wrongful acts and omissions, Defendants were unjustly enriched at the

expense of and to the detriment of Dr. Shetty, Neopharma and Nexgen (of which Neopharma

sustained fifty percent (50%) of Nexgen’s total damages).

365. All revenues and profits earned by the Defendants from their misconduct were at

the expense of Dr. Shetty, Neopharma and Nexgen.

366. Accordingly, Dr. Shetty and Neopharma are entitled to a recovery against the

Defendants in an amount, to be determined at trial, equal to the benefits and profits the Defendants

have unjustly received as a result of their aforementioned actions.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray for judgment and relief against the Defendants jointly and

severally, as follows:

A. An award of compensatory damages to Dr. Shetty in an amount to be determined

at trial, but presently believed to be in excess of $7.0 billion;

B. An award of compensatory damages to Neopharma in an amount to be determined

at trial, but presently believed to be in excess of $1.0 billion;

C. An award of punitive damages against Defendants and for Dr. Shetty in an amount

to be determined at trial;

D. An award of punitive damages against Defendants and for Neopharma in an amount

to be determined at trial;

E. An award of attorneys’ fees and costs to Plaintiffs; and

F. Such other and further relief in Plaintiffs’ favor, as the Court may deem just and

proper.



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Dated: New York, New York July 16, 2021 MEISTER SEELIG & FEIN LLP By: /s/ Alexander D. Pencu Alexander D. Pencu Benjamin D. Bianco 125 Park Avenue, 7th Floor New York, NY 10017 Tel: (212) 655-3500 Email: [email protected] [email protected]

Attorneys for Plaintiffs



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FILE Ready Complaint Without Nexgen(8348340.2)

Documents

Transcript of FILE Ready Complaint Without Nexgen(8348340.2)