Bank of Baroda shares slip 3% amid reports of $15 billion lawsuit; lender says it is yet to be served

State-owned lender Bank of Baroda (BoB) was on investors’ radar on Wednesday, October 14, amid reports of a major legal development.

The stock slipped as much as 3.36% to ₹230.40 on the NSE.

In the petition filed before the Bombay High Court, Shetty has sought $5 billion in direct damages, another $5 billion in consequential damages, including losses arising from business and investment opportunities, and a further $5 billion from BoB for alleged reputational damage and loss of business standing and goodwill. The total claim amounts to approximately ₹1.44 lakh crore. Shetty has also sought interest at 18% per annum.

According to the lawsuit, Shetty relinquished control of the group companies in 2012 and stepped down as chief executive officer in March 2017. He has alleged that he learnt only in early 2020 that he continued to be NMC’s chairman, following which he resigned. The lawsuit further claims that former executives used forged instructions and signatures to route funds through personal and corporate accounts, making it appear that Shetty was involved in the transactions.

The suit also alleges that BoB ignored repeated anti-money laundering (AML) alerts, extended credit without adequate security, facilitated transactions through supplier accounts allegedly used for round-tripping, and concealed its lending exposure from auditors. It further accuses certain bank officials of accepting gifts and failing to act on warning signs despite internal scrutiny.

These allegations are claims made in the lawsuit and have not been established by a court.

The state-owned lender added that it would firmly defend the suit and take all necessary steps to protect its interests if and when it is served.