The Enforcement Directorate (ED) on Wednesday has attached assets worth Rs9,778 crore in connection with money laundering probe against Gujarat-based pharmaceutical company Sterling Biotech. The assets attached by the ED includes those belonging to the Sandesara brothers spread in different countries such as an oil well in Nigeria and an aeroplane and a bungalow in London.
In August 2017, ED had registered a money laundering case against the Sterling Biotech group, its promoters, Chetan and Nitin Sandesara and others, days after a case of alleged bank fraud of Rs5,700 crore was filed against them by the Central Bureau of Investigation (CBI).
Investigation by the ED revealed that the Sandesara brothers and others hatched a criminal conspiracy to cheat banks by manipulating figures in the balance sheets of their flagship companies to induce banks to sanction higher loans.
According to the ED officials, after obtaining loans, the accused diverted them to non-mandated purposes through a web of shell companies. Thus, the loan funds were diverted, layered and laundered by the promoters for personal purposes. The total amount of loan fraud was put at Rs8,100 crore. Between 2004 to 2012, several banks granted loans worth Rs5,700 crore to the Sandesaras.
The ED said it had arrested four persons including a Delhi-based businessman-cum-middleman, Gagan Dhawan, Andhra Bank's former executive director Anup Garg, Sterling Biotech's director RB Dixit and Ranjeet Malik, an aide to Mr Dhawan.
Earlier, on 22 March 2019, Hitesh Narender Patel, who is brother-in-law of the Sandesara brothers was detained in Albania's capital Tirana. This was based on a red corner notice (RCN) issued by Interpol on 11th March as per request from the Indian authorities.
The ED said the Sandesara brothers have incorporated more than 100 entities in various countries including the UAE, the US, the UK, British Virgin Island, Mauritius, Barbados and Nigeria.
Their main entities outside India include Richmond Overseas, Sunshine Trust Corp, SEEPCO BVI, SEEPCO Nigeria and Atlantic Blue Water Services.
In March this year, the ED had also warned that it could attach the entire amount of the one-time settlement (OTS) to be paid by the absconding directors of the scam-hit Sterling Biotech Group to the Committee of Banks. The ED informed the National Company Law Tribunal that it is also in the process of declaring the company's promoter Nitin Sandesara as an absconder under the stringent Fugitive Economic Offenders Act, 2018, (FOEA) and the agency has already attached Rs4,700 crore worth of the promoters' assets so far.
Since the FEOA supersedes all other laws, the ED had said it can also attach and seize the entire amount of the OTS which the banks, led by the Andhra Bank, expect to get from the Sterling Biotech Group.
The agency's response came to the 14th March notice issued by the NCLT, Mumbai members VP Singh and R Duraiswamy, after the committee of creditors sought withdrawal of the corporate insolvency resolution process (CIRP) after the Sterling Biotech Group's absconding promoters agreed to pay an OTS.
The Gujarat-based pharmaceutical company owes Rs8,100 crore only to the banks and more to other financial creditors, amounting to a total of around Rs14,938 crore - bigger than the Nirav Modi scam.
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