Bengaluru, 14th Aug 2020 : In what seems to be a massive attempt by the Indian government to cover up the misdeeds of the much maligned UAE business tycoon, founder of NMC health and many of its sister concerns, BR Shetty, and to bail him out of his financial woes, a big scam has been unearthed recently.
The Council of Scientific and Industrial Research (CSIR), in collaboration with one of its constituent laboratories, Indian Institute of Chemical Technology (IICT), Hyderabad had announced end April that they will now be setting up indigenous plants in India with an integrated pharmaceutical company LAXAI Life Sciences to jointly develop and manufacture APIs and its key intermediates. This announcement was made shortly after the government announced a Rs 14,000 crore package to incentivise production of APIs in the country and reduce import dependence of this key pharma input from China.
A person close to the matter revealed, “LAXAI Life Sciences was to be one of the first few to commercialise these products manufacturing APIs and intermediates at USFDA/GMP approved plants held by LAXAI through its subsidiary, Therapiva. Vamsidhar Maadi Patla, CMD, LAXAI Life Sciences and Nikhil Baheti, CFO, Therapiva were propped to provide just the ideal leadership with extensive experience and expertise in pharma to spearhead this breakthrough R&D, but it turned out that this was just a big show put up to mislead unsuspecting public into thinking what a grand deal this would prove to be. The real plan was to help BR Shetty regain a foothold in his crumbling empire.”
A closer inspection of their websites revealed only projections and capabilities with absolutely zero reference to any research and manufacturing that may have happened at their end. When these firms were contacted, however, no one came out in the open to comment.
An inside source, on conditions of anonymity said, “Since this was to be a collaboration with CSIR, these firms were projected to be much better than the others in pharma research and development. A lot of noise was made about the formidable credentials of these firms so that no one would question either their background or the basis of this deal. No one would ever suspect that the antecedents of these firms could be traced back to BR Shetty.”
Seemingly no due diligence was followed by CSIR in going ahead with this collaboration. When, Information and Credit Rating Agency of India Limited (ICRA India), an independent and professional investment information and credit rating agency, assessed Therapiva’s documents, it was ascertained that it was a firm immersed in debts with very poor net worth.
On further investigation, it emerged that both the companies were owned by a certain Omnicare Drugs India Private Limited, Hyderabad which had 61% stake in the companies. The parent company of all these establishments was traced to be Neopharma Holding Pvt. Ltd. based out of the UAE, one among the many business ventures of BR Shetty.
The source added, “Shetty has been closely associated with the RSS ever since the Jan Sangh days and has openly pledged his support to the PM Narendra Modi claiming that he will be investing billions of dollars in healthcare infrastructure in Varanasi as well as healthcare, education, agro products, tourism and film city projects in J&K proclaiming this to the PM in the many public events organised by BJP, that he participated in. With the PM having such an ardent follower in Shetty, it seems he is now lending as much covert support as he can to Shetty so he can go back to being the czar of his kingdom.”
Shetty flew to India in February to care for his ailing elder brother, who has since passed away. While Shetty claims that he has ‘launched his own legal and forensic investigations and will share the results with appropriate authorities’, he is grappling to pay off a debt of $6.6 billion, far higher than the $2.1 billion it had initially revealed. Creditors have moved against the top management, with Abu Dhabi Commercial Bank (ADCB) as well as the bank of Baroda, India filing criminal cases against him and NMC having been placed under administration given that the real debt is approximately 3.5x the reported amount.
Since, the announcement by CSIR came just 10 days after ABCD filed a criminal complaint against Shetty and just about 3 weeks after London banks froze all his bank accounts, there seems to be an unmistakable nexus between the government and Shetty to not just keep him afloat but also to help him tide over his financial woes with the taxpayers money. There seems to be definitely much more going on behind the curtains, than what is meeting the eye!