Billionaire Bavaguthu Raghuram Shetty had it all. Then Carson Block came along a week later

He splurged on the Burj Khalifa, the world's tallest skyscraper, a private jet, vintage cars and two whole floors. With politicians, Bill Gates and Bollywood celebrities, his website shows him hobnobbing.

"I love cars because of the thrill of speed and independence," Shetty, 77, told local reporters in 2019

Shetty had more than enough money to afford such a lifestyle-at least on paper-from the businesses he helped find, including hospital provider NMC Health Plc and Finablr Plc, a financial services firm. His shares in the public companies were estimated at $2.4 billion on Dec. 10, making up the bulk of a fortune covering education, hospitality and one of the oldest tea companies in the world.

And then, Carson Block came along a week later. Muddy Waters, the investment firm of Block, has released a report attacking NMC's accounts and reporting a short position. Since then, scrutiny of Muddy Waters has snowballed into a disturbing Shetty scenario that sheds light on his complicated ownership agreements and casts doubts about his net worth. The Finablr and NMC shares are worth $885 million, but Shetty's fortune may now be just a fraction of that, depending on the size of his borrowings.

This month's filings show that Shetty pledged a quarter of his NMC interest against loans with First Abu Dhabi Bank and Falcon Private Bank, based in Zurich. Two other shareholders can own half of its interest published. Another lender — Al Salam Bank Bahrain — has already sold some of those shares to protect Shetty's loan, And on Tuesday, NMC said First Abu Dhabi Bank had sold another chunk earlier this month.

The situation "seems to have gone beyond some of the problems that Muddy Waters originally concentrated on," said Gavin Launder, a fund manager at Legal & General Investment Management, who until October held NMC securities. "The increased scrutiny has unraveled other things." At his request, a spokesman for the Indian-born businessman said, law firm Herbert Smith Freehills has launched a review of Shetty's holdings declining to comment further until the analysis is complete. Shetty resigned as president of the NMC Sunday.

Muddy Waters pointed to potential overpayment for assets, inflated cash balances and understated debt in its Dec. 17 report on NMC. Shares of the largest private healthcare provider in the United Arab Emirates have since plunged 67 percent, and the company is now the focus of acquisition speculation. The sell-off also spread to Finablr, whose stock in that span has plummeted 64 per cent. NMC disputed the claims of Muddy Waters and former FBI Director Louis Freeh was hired by the company to conduct an independent review of the allegations of the short seller. Local regulators, meanwhile, "make inquiries with the relevant parties," said a spokesperson for the Financial Conduct Authority of the UK.

NMC shares have stalled since the Muddy Waters report; Finablr also falls Shetty is hardly the only ultra-rich person to exploit his money. Elon Musk has used his investments in Tesla Inc. to secure personal loans, while Oracle Corp. Chairman Larry Ellison has put up millions of shares in the company to finance a lifestyle that includes luxury houses, America's Cup teams and the Indian Wells tennis facility in California. But such agreements can also be bad, as shown by Shetty's lenders selling shares pledged to his investment firm. As part of their legal review, he and his lawyers are reviewing revenue information according to the filings.

In 2018 Shetty pledged another batch of NMC stock to complicate matters as part of a so-called equity collar deal with Goldman Sachs Group Inc. that uses options to limit the impact of share movements. He also pledged most of his interest in Finablr last month to refinance a loan for approximately $1.2 billion from the company's acquisition of foreign-exchange firm Travelex.

BRS Ventures Investment, a holding company based in the UAE for most of Shetty's assets, does not disclose consolidated financials, thereby preventing a full analysis of its net worth. The other investments include a catering company, a waste-management company and Neopharma pharmaceutical company that was in the early stages of planning for an initial public offering four months ago.

Block, 43, proved his worth as a short seller a decade ago by attacking Chinese companies listed in the U.S. that he believed were fraud. Most recently, the British litigation investment company Burford Capital Ltd. and Japanese biotech stock PeptiDream Inc. were the subject of his San Francisco-based business. Short sellers seek to take advantage of a decline in the share price of a company.

In 1975 Shetty founded NMC after moving from his native India to Abu Dhabi. Two years ago he founded Finablr to combine his financial brands before it was listed on the London Stock Exchange in 2019.

Block has said he has not anticipated the shareholding drama of NMC. "I wouldn't have been able to predict that we would be getting these bizarre disclosures of unclear share ownership from the company," he said in a telephone interview on Feb. 13. "This was clearly a more dramatic unraveling than we normally see."