Fugitive Sandesaras Claim “Religious Persecution” due to Ahmed Patel Link; Say They Are Victims of “Malfunctioning” Banking System
At a time when the government wants to create a ‘bad bank’ to transfer non-performing loans of corporate India owed to public sector banks (PSBs), the story of the Sterling group provides an astonishing picture of how several thousand crores of rupees of outstanding dues are being wiped out in collusion with PSBs, agencies and the government. 
 
The fugitives, Gujarat-based promoters of the Sterling Biotech group holed up in Nigeria, have managed to beat India’s extradition attempt in 2019, by claiming that they are facing ‘religious and political persecution’. They also got the Interpol to cancel a red-alert. These startling facts were revealed recently in documents submitted in the Supreme Court (matter MA-972 of 2020) through Richmond Investments Pvt Ltd. Meanwhile, the Sandesaras continue to calmly lobby to regain control over their Indian companies, by paying just the principal amount, which is 35% of their total outstanding dues. 
 
Astonishingly, their claim of religious persecution is based on their ‘strong affiliation’ with the late Congress leader ‘Ahmed Patel, who is a Muslim’. These charges have been accepted by courts in Nigeria and Albania to deny their extradition to India. (see excerpts from orders below) 
 
 
The Sterling group runs a flourishing oil business in Nigeria and the US, making it perfectly capable of paying up their entire dues to the Indian banking system, mostly PSBs. Stunningly, in these days of hyper nationalism, when a 22-year old environmental activist is jailed for eight days and slapped with serious sedition charges, the Sandesaras’ claims against India have not even found a mention in the mainstream media, although they are being investigated by every top investigative agency. 
 
Moneylife has reported extensively on the shenanigans of this fugitive group; but let us look at the recent developments sequentially, going backward from the latest Supreme Court (SC) order in February 2021. Sometime in 2019, the Sandesaras managed to get Sterling Biotech out of the bankruptcy proceedings by negotiating a small one-time-settlement (OTS) with its creditors— mainly Indian PSBs. But the Sandesaras have been delaying even this payment and re-negotiating its terms for the past two years.
 
In the latest litigation (Miscellaneous Application No. 972/2020 in C.A. No. 9473/2019), the group sought time to delay the payment by another year, to 31 March 2022, and to pay the money in four instalments starting June 2021. Meanwhile, their oil business in Nigeria is flourishing and these oil companies continue to do business with India. A YouTube video of 2020 sent to me shows a lavish corporate event hosted by the Sandesaras’ oil company in Nigeria, where Mr Sandesara claims that his oil companies contribute 2% to the Nigerian exchequer. And, yet, they want a settlement in India without paying interest and have almost got away with it. YouTube Video
 
On 22 February 2021, a Supreme Court bench of justice Rohington Fali Nariman and justice BR Gavai disposed Richmond Investments’ petition without granting the extension of time requested by the Sandesaras. If the group pays up the balance of Rs3,110 crore, offered as OTS by the end of this month, they will regain control over their company even while accusing India for persecution. More on this later. 
 
Earlier, on 25 April 2019, the attorney general’s office in Nigeria, writing to Sterling Global Oil Resources Ltd on the extradition of the four absconders, said that “after a careful review” of the matter, it has rejected India’s extradition request because “the offences allegedly committed” by the persons appear “political in nature” which is a condition of refusal of extradition in the Federal Republic of Nigeria. The letter is signed by the Chief State Counsel.
 
 
The case of the fourth promoter, Hiteshkumar Patel, took a slightly different trajectory. On 21 March 2019, he was actually arrested in the Republic of Albania based on an Interpol red alert. The red alert was based on a warrant issued by a magistrate’s court, Delhi, in January 2019, under the prevention of money laundering charge related to Sterling Biotech. Mr Patel appears to have spent over 40 days in house arrest. The hearing of his matter in Albania referred to the Nigerian government rejecting the extradition of the Sandesara family for various reasons including “malfunctioning of banking service”. The fugitives have sought political asylum on the grounds of “fear of political and religious persecution”.  
 
On 3 July 2019, an Albanian court set Mr Patel free from ‘house arrest’, returned his passport and identification documents, and refused extradition on the grounds of his “political persecution because of religious beliefs”.
 
 
Papers submitted in the Supreme Court by Richmond Investments show that Nitin Jayantilal Sandesara had also obtained a formal letter from Interpol that he was not subject to any notice or order!
 
How Sandesaras Want To Regain Control from Nigeria
In a recent court filing, Richmond Investments (of the Sandesaras) claims that it has paid back Rs1,332 crore, which is allegedly “more than the disbursed amount.” However, due to “certain policy factors and reasons beyond control,” they have bad loans (remember they argued in Nigeria that it is due to our faulty banking system). Readers can draw their own conclusion from the claim that Sterling Biotech remains a well-run company with Rs100 crore available in bank balances and Rs180 crore in working capital and thousands of employees. And, yet, there are absolutely no bidders for the company, except a capsules manufacturer, who had offered Rs360 crore, which is less than the liquidation value arrived at—of Rs420 crore. This is probably one of the biggest mysteries in Indian business that nobody wants to unravel, least of all PSBs who only act on political orders. 
 
Sterling Biotech had offered Rs3,110 crore as OTS which is about 35% of what it owed banks with interest (Rs8,100 crore). The group, as a whole, owed banks Rs15,600 crore two years ago, on which interest would have only increased). Money was to be generated from investors in Dubai and cash-flow from its Nigerian businesses. For the first time, court documents name a Dubai-based investor, Al Khoory Holding Ltd, as willing to invest in Sterling.
 
It had already made an initial payment of Rs167 crore—and then paid Rs204 crore more—making total of Rs371 crore that has been paid upfront. It is alleged that several lenders delayed formal acceptance of the OTS for a year, allowing the Sandesaras to drag repayment by blaming banks. These delays also warrant a vigilance inquiry. But the Sandesaras used the delay and the COVID pandemic to demand time until 31 March 2021 (at a consortium meeting on 4 August 2020). This also diluted the terms, allowing them to pay 75% of the settlement money. 
 
But this is apparently not good enough. The group asked for another 15 months to make the payment, dangling the carrot of a 20% upfront payment (amounting to Rs528 crore) by 31 March 2021. They approached the Supreme Court with a request to pay the balance 80% in four instalments by 31 March 2022 in four quarterly instalments—starting June 2021. Since clearances by investigative agencies were also involved, banks also pushed the decision to the Supreme Court. Sterling Biotech accuses investigation agencies of launching ‘frivolous prosecution’ and placing roadblocks to the settlement. 
 
It is important to remember that Sterling Biotech is only one of the companies run by these fugitive economic offenders in India. Their Nigerian operations continue to do business with government-owned Indian oil companies and their companies in India and abroad include Sterling Global Oil Resources Pvt Ltd Mauritius (SGORPL), Sterling Biotech Ltd (SBL), Sterling SEZ & Infrastructure Ltd (SSEZ), Sterling Port Ltd (SPL) and PMT Machines Ltd (PMT). 
 
Clearly, the Sandesaras and the Sterling group as defaulters, with thriving businesses overseas, are on a completely different plane from others and even get away by ridiculing the country and its systems without drawing any political anger or action! At a time when the government is set to privatise public sector companies and lenders use strong-arm tactics with small borrowers, this massive give-away to politically exposed private sector companies is downright scandalous. 
 

Comments
praveen.agnihotri
8 months ago
It is a neat piece of reporting, however, including Disha Ravi which was completely unnecessary and doesn't add anything to this article, creates doubts on the intentions of the writer.

Now, I am not sure how much to discount this article to get to the extent of truth in it. Another pen warrior, wasted!!
sucheta
Replied to praveen.agnihotri comment 8 months ago
Doubts are in the mind of the doubter. Anyone else would ask logical questions as an ordinary citizen looking at things dispassionately and not coloured by ideology!
Newme
8 months ago
With all due respect Madam, there are plenty of other rotten fishes. Please throw light on them as well. Orchid Pharmaceuticals for one. One fine day all the shares in retailers demat account vanished. Nobody knows why. It hit 18₹ last March now it\'s around 885₹ hitting UC after UC. Only Bitcoin may give better returns. So much manipulation in broad day light.
sucheta
Replied to Newme comment 8 months ago
With due respect sir, if you know so many "rotten fishes" make the effort to collate information. Also if you think your personal grouse about Orchid compares with what is written about Sandesaras, there is a huge disconnect on understanding scams. The ideal way to deal with it would be for you to turn into a crusader yourself.
Newme
Replied to sucheta comment 8 months ago
Fair enough Madam. Only thing I never bought Orchid nor LVB but I do emphasize with those investors crying in MC forum.

I respect you and ML team big time.
Newme
Replied to Newme comment 8 months ago
Auto error please read as empathize
tillan2k
8 months ago
The way Nirav modi is argued was no targued ot the judicail authrities were not objective like in UK . Nigerian Judicail system appears to be like Indian system phony decisions. loook at Jayalata assets, tansi lake Uphar ansal
dayanandakamath29
8 months ago
It is greatness of present Indian political system and media including judiciary that they will highlight any thing that can be pinned to Modi even if it is against Indian interest.
angelo.extross
8 months ago
The stoic silence of the Government in office is intriguing. Others are branded
"anti-National" - what are these?
yerramr
8 months ago
Truly an astounding investigation story'. Many pigeons in the hole. Supreme Court also needs guidance of professional to ensure that the errand do not engage in a vanishing trick.
baskarans53
8 months ago
I appreciate your investigative journalism. However in stead of keeping an open ended criticism enlighten as to how the present government which has inherited this s am can salvage max amount of tax payers’ money. This is more important to act as a guidance for future scams, which are likely. Govt. has already plugged the “ escape” route of criminals, although belatedly.
prime
Replied to baskarans53 comment 7 months ago
Follow the court orders. Enforce the One Time Settlement. Name them as official defaulters. Take over their assets. And stop the oil companies doing business with them.

Instead of chasing soft targets with sedition charges.

Where there is political will, there is a way.
RVR
Replied to baskarans53 comment 8 months ago
Well said baskaran53. The article is a whodunit leaving too much to the imagination.
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