Banking giant Barclays is seeking $130 million from embattled Indian businessman BR Shetty through a claim filed in the Dubai International Financial Centre Courts.
The bank in a court filing says its claim “is in relation to an unlimited guarantee” provided by Mr Shetty in January 2015 for funding extended to UAE Exchange, part of the businessman’s Finablr money exchange and digital payments group.
“Despite certain liabilities becoming due and payable by the defendant to the claimant under the guarantee, the defendant has failed to pay these,” according to the court filing.
The court claim, seen by The National, says UAE Exchange has been a client of Barclays since 2007 and has used the bank's online trading platform since 2012. It says Barclays paid out more than $129m over a three-day period from March 10-13 to cover foreign exchange transactions, which the company was obliged to settle in various currencies "but failed to do so".
Barclays says it first became aware UAE Exchange had failed to make settlements on March 17, the same day that the UAE Central Bank stepped in to oversee the company's operations.
A spokesman for Barclays declined to comment on the case when contacted by The National. Mr Shetty also declined to comment, but it is understood that he intends to contest the claim.
Finablr is a payments and foreign exchange group that includes UAE Exchange, Xpress Money, Unimoni, Remit2India and the Bayan Pay brands. It also previously owned the Travelex foreign exchange business, bought by Mr Shetty for £1 billion ($1.3bn) in 2014, but it was taken over by its lenders in a restructuring deal agreed in July.
Finablr floated on the London Stock Exchange in May 2019 in a deal that valued the business at £1.23bn but its shares have been suspended since March, by which time its market capitalisation had shrunk to £77.2 million.
The company reported in May that its debt was $1bn higher than the $334.1m in its last reported accounts for the six months to June 30, 2019. The publication of subsequent accounts has been delayed as lawyers continue to investigate “historic potential malfeasance” within the group.
A sale process for Finablr is currently under way which would lead to a restructuring and the settlement of its existing debt. However, the deal with Prism Advance Solutions is only likely to result in a "nominal consideration" being paid for the business, Finablr said in a statement earlier this month.
Currently, only a handful of UAE Exchange's 150 branches are open to handle customer queries, as no new business is being conducted while it remains under supervision, chief executive Bhairev Trivedi told The National on Saturday.
He said the company intends to have branches reopened as quickly as possible once takeover terms are concluded but that a timeframe is "purely dependent" on the regulatory process, with approval needed from the UK's Financial Conduct Authority before a deal is signed off.
Mr Trivedi said that his main priority since his appointment as chief executive in April has been to get UAE Exchange trading again, as the bulk of the group's 3,000-4,000 local employees work in that business. Globally, it employs about 8,000-9,000 staff, he added.
Mr Shetty, who has been in India since February, has claimed that he has been the victim of a fraud committed by former managers at Finablr, NMC Health and a number of other privately-held companies owned by him.
NMC Health was placed into administration in April this year following the discovery of more than $6.6bn worth of debt, which was also considerably higher than the $2.1bn in its last filed accounts.
The DIFC Courts granted a worldwide freezing order on Mr Shetty's assets on behalf of Credit Europe Bank, which filed a separate, $8m claim against him and against two UAE-based subsidiaries of NMC Health in June.
