ED, CBI booked the Sandesaras in a Rs 5,000-crore bank fraud case, which is also linked to a CBI turf war involving two top officers.
New Delhi: Once the toast of the town, the Sandesaras of Gujarat are now being chased by agencies for an alleged Rs 5,000-crore bank fraud.
Latest reports suggest that Nitin Sandesara, owner of pharma company Sterling Biotech, could have fled to Nigeria along with other family members, including brother Chetan and sister-in-law Diptiben. The family is wanted by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) in the alleged bank fraud case.
The Sandesaras join a long list of fugitives accused of financial wrongdoing — Indian businessman and former IPL chairman Lalit Modi, liquor tycoon Vijay Mallya and diamond merchant Nirav Modi.
In June, ED attached the company’s assets worth Rs 4,701 crore under the Prevention of Money Laundering Act (PMLA). Sterling Biotech has its manufacturing facility at Masar in Gujarat.
The Sandesara Group’s alleged fraud, meanwhile, is at the heart of a larger controversy involving the CBI. In what is seen as an open war between CBI director Alok Verma and special director Rakesh Asthana, the agency has said it is probing the latter in as many as six cases, including the Rs 5,000-crore Sterling Biotech case, in which there are diaries with two entries of Asthana’s name.
Close to power centres
A chartered accountant by profession, Nitin Sandesara stepped into the world of business in 1985, forming Sterling Tea and acquiring tea gardens along with younger brother Chetan. The group subsequently diversified into pharmaceuticals, healthcare, oil and gas, engineering and the onshore rigs business.
Before things began to fall apart, however, the Sandesara family was an important cog in the well-oiled business world of Gujarat, PM Narendra Modi’s home state. The group was a sort of fixture and had been a crucial part of the Vibrant Gujarat Summit, an initiative taken by Modi in 2003 when he was chief minister.
For instance, in the 2007 summit, the Sandesara Group had inked an MoU worth Rs 20,000 crore to develop a multi-purpose SEZ at Jambusar in Bharuch district. In 2009, the group had signed projects worth Rs 15,000 crore. In the 2013 summit, it had committed Rs 30,000 crore for a power SEZ, aircraft MRO and expansion of Sterling SEZ.
In 2015, Sandesara Group — the only Indian company producing crude oil in any OPEC country — had announced an investment of $3 billion in Nigeria.
The high-profile conglomerate had received government help in the form of subsidised land for several years. In June 2014, the Gujarat Maritime Board entered into a concessional agreement with Sterling Port for development of a greenfield port at Dahej in Bharuch district, for which the company was awarded a 30-year concession.
“Sterling with its new thinking, new capabilities and sense of urgency aspires to ‘earn trust, every moment’ of its partners, collaborators, stake holders and customers,” Sterling Biotech’s website says.
The group, which runs Sterling Biotech, Sterling SEZ, Sterling Ports, Sterling Energy and PMT Machines, has been accused of defrauding banks since 2010. According to agencies, various companies of the Sandesara Group had fraudulently obtained credit facilities of more than Rs 5,000 crore from banks, including Andhra Bank, UCO Bank, SBI, Allahabad Bank and Bank of India, which subsequently turned into NPAs.
According to the FIR filed in August last year, the income tax department had conducted search and seizure on 25 premises of the group in Vadodara, Mumbai and Ooty. It said “certain incriminating documentary evidences were found and seized from the premises of the group at Mumbai and Vadodara”.
The FIR also mentions “a diary of 2011, a hand written record of certain transactions of the group for the period from 01.01.2011 to 28.06.2011”.
The FIR mentions three names — S.K. Ojha, Subhash Chandra and one “Mr Ray” — and goes on to give details of the diary records. A case was, thus, registered against Ojha (IRS), Chandra (IRS), and Manas Shankar Ray (IRS), along with Sterling Biotech Ltd.
In November last year, the ED had arrested Delhi-based businessman Gagan Dhawan, former Andhra Bank director Anup Garg and Sterling Biotech director Rajbhhushan Omprakash Dixit in this case.
“The modus operandi…involved formation of shell/benami companies, manipulating balance sheets, inflating turnovers, insider shares trading, etc. These shell and benami companies were controlled by the Sandesaras through dummy directors, who were/are employees of the various companies of Sterling Group. Bogus sale/purchase was shown between the benami companies and the Sterling group of companies in order to divert loan funds and inflate turnovers to obtain further loans from banks,” the ED had said in a statement.
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