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B.R. Shetty's flagship company Abu Dhabi-based NMC Health was has been placed under the UK court's supervision.
The court will now appoint administrators to oversee the whole management and operations of the UAE's largest healthcare operator, Gulf News reported.
The existing Board of Directors of NMC "cease to have decision-making powers with immediate effect". These powers were transferred to the Administrators who are responsible for the day-to-day running of NMC.
But "all hospitals, medical centres, care facilities and other operations in the group are not subject to the administration procedure - so their current activities will not change," a statement issued on Thursday confirmed.
According to the report, a court in the UK came into the picture because NMC Health is listed on London Stock Exchange, and thus bound by UK rules governing public companies. It listed on the LSE in 2012.
This follows an appeal filed by the ADCB (Abu Dhabi Commercial Bank) with the UK court for "joint administration" of NMC Health, after it was found that the hospital operator had $6.6 billion in bank debt and was in no position to pay it off.
UAE banks combined have exposures of 10 billion dirhams plus, with ADCB having the highest at 3.6 billion dirhams.
In a statement after the UK court ruled in its favour, the ADCB issued a statement: "ADCB and other key creditors have concluded that an administration process is the most suitable route to ensure a rescue and turnaround of NMC Health PLC and its subsidiaries.
"The true picture of the financial difficulties faced by NMC only became apparent through a series of announcements by the Company since February 2020, including the uncovering of over $4 billion of previously undisclosed debts.
"Contrary to the information the Group provided to ADCB and in breach of the various loan covenants and commitments, following these revelations, the Bank learned that it was among over 80 major regional and international financial institutions that extended credit to the Group."
Since its set up in the mid-1970s, NMC established its credentials as a key private healthcare business. Through the 1990s and the last decade, it cemented that position through a series of expansion, including multiple speciality hospitals in Dubai and Abu Dhabi.
It now has 194 medical facilities across 19 countries, according to the ADCB statement.
Gulf News said that NMC was also the flagship around which Shetty built up a business empire in the UAE and elsewhere. Now, with NMC going into administration – and a step away from full-scale insolvency – the UAE arm of that empire is in relative tatters.
The other arm, UAE Exchange Centre, is also under investigation, this time by UAE Central Bank.
And it only took three months and 15 days for the whole edifice to crack, the report said.
Shetty said in a statement: "Out of respect for due process and to allow the various investigations to quickly and independently undertake their mandates, I have refrained, to date, from making any extensive public statements.
"However, as I've said previously, I am carefully undertaking my own investigations of the information available to me, and I will make these findings known as soon as possible, and in the proper and appropriate manner.
"I am extremely eager and determined to bring to light the full facts, and the whole truth, around what has transpired to all stakeholders as quickly as possible. This is especially urgent in order to bring much needed support and reassurance to the thousands of dedicated doctors, nurses and healthcare workers of NMC Health, and in light of the current public health crisis."