Lilavati Hospital trust alleges Rs 1,200 cr fraud, files complaint with ED

The Lilavati Kirtilal Mehta Medical Trust (LKMM) filed a complaint against its ex-trustees, accusing them of siphoning off trust funds through fraudulent means and illegal offshore transactions

The charitable trust that operates Mumbai’s Lilavati Hospital has filed a complaint with the Enforcement Directorate (ED) against its former trustees, alleging financial embezzlement exceeding Rs 1,200 crore.

 

The Lilavati Kirtilal Mehta Medical Trust (LKMM) accused them of siphoning off the trust funds through fraudulent investments, kickbacks, and illegal offshore transactions.

 

The fraud came to the fore following a forensic audit, which reportedly uncovered “large-scale irregularities, manipulation, and siphoning of funds” by the previous administration. Following a prolonged legal battle, the current trustees had assumed control of the trust, and the audit was conducted by Chetan Dalal Investigation and Management Services (CDIMS) and ADB & Associates.

   

The audit found illegal investments worth Rs 11.52 crore in companies such as Mayfair Realtors and Vesta India, allegedly made without proper accounting, fraudulent legal fee payments of Rs 44 crore, misrepresented as legitimate expenses, procurement-related financial mismanagement exceeding Rs 1,200 crore, involving alleged kickbacks and illicit dealings with third-party distributors.

 

It also found an ongoing investigation in Gujarat into the theft of valuables from Lilavati Hospital’s Gujarat facility, a Rs 500 crore tax claim filed by the Income Tax Department in the High Court, challenging disallowed expenses by the former trustees.

 

Based on these findings, multiple first information reports (FIRs) have been registered against the accused at Bandra Police Station and later transferred to the Economic Offences Wing (EOW). The accused named in the FIRs include Chetan P. Mehta, Rekha H. Sheth, Ayushaman C. Mehta, Niket V. Mehta, Sushila V. Mehta, Rashmi K. Mehta, Bhavin R. Mehta, and Nimesh Sheth.

 

Given the scale of the alleged fraud, which qualifies as a predicate offence under the Prevention of Money Laundering Act (PMLA), LKMM has urged the ED to take swift action.

 

The alleged financial misconduct has reportedly impacted Lilavati Hospital, a multi-specialty institution serving thousands of patients daily. The trust claimed that the misappropriation has

compromised patient care as funds meant for medical facilities were allegedly misused, affecting hospital operations.

 

The trust said the financial fraud drained charitable resources as donations and funds earmarked for healthcare were diverted. It eroded public trust by raising concerns over governance and financial accountability in India’s charitable healthcare sector.

 

“We are committed to ensuring that every rupee meant for patient care is used solely for that purpose. The financial mismanagement uncovered is a betrayal of public trust and a threat to our hospital’s mission. We urge authorities to take swift action so that justice is served and our institution can continue providing world-class healthcare without financial uncertainty,” Prashant Mehta, permanent resident trustee of LKMM, said.