Nitin Sandesara, promoter of Sterling Biotech | @SarveshSays/Twitter
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Rakesh Asthana’s name appeared in the Sterling Biotech diaries seized in 2011, but it has not been mentioned in five prosecution complaints filed so far.

New Delhi: The Enforcement Directorate (ED) has filed its fifth prosecution complaint — or supplementary chargesheet — in the Rs 8,100 crore Sterling Biotech bank loan fraud case, naming 191 accused, including the Sandesara family.

However, this time too, CBI special director Rakesh Asthana’s name has not been mentioned.

Asthana’s name had cropped up in one of the diaries that were seized during a raid at the Sandesara premises by the Income Tax Department in 2011. On the basis of that diary three Indian Revenue Service officers were named in the CBI case, but Asthana was not named.

On 24 August, Asthana had written to the cabinet secretary that the initials “RA” mentioned in the diary stood for “running account” and not his name.

The accused named by the ED include seven persons — Nitin, Chetan and Dipti Sandesara; chartered accountant Hemant Hathi; middleman Gagan Dhawan and two unspecified “others” — and 184 companies, of which 179 are allegedly shell companies.

The agency has so far filed four provisional complaints in the case that was registered in August 2017, and has attached assets worth Rs 4,710 crore allegedly purchased with the laundered money.

Manipulated balance sheets

According to officers, the investigation in the case has revealed that the Sandesaras and others hatched a criminal conspiracy to defraud the banks by manipulating figures in the balance sheets of their flagship companies, inducing banks to sanction higher loans.

After obtaining the loans, the Sandesaras allegedly diverted the funds to non-mandated purposes through a web of shell companies.

“The funds were diverted, layered and laundered by the promoters for their personal purposes. The total amount of loan fraud as on date is Rs 8,100 crore. The loan fraud pertains to domestic as well as offshore branches of Indian banks,” an ED officer said.

Also read: All you wanted to know about the war in CBI between Rakesh Asthana and Alok Verma

The companies named include flagship firms of the group — Sterling Biotech Limited, PMT Machines Limited, Sterling SEZ and Infra Limited, Sterling Port Limited and Sterling Oil Resources Limited — besides 179 shell companies.

Multi-layered strategy

The provisional complaint states that the Sandesaras devised a multi-layered strategy of cheating, whereby they not only cheated banks, but also the revenue department and their shareholders.

“To fulfill their criminal motive of defrauding banks, they incorporated shell companies, conducted circular transactions to artificially inflate turnover of flagship companies, and claimed higher depreciations on non-existing machinery,” the officer said.

“They also did artificial share trading with the use of those shell companies, layering and laundering of proceeds of crime within India and abroad.”

The investigation also revealed that the promoters allegedly used their employees’ names and got 249 shell companies incorporated.

“The original PAN cards, original stamps, original seals, original Memorandum of Associations and original signed but blank cheque books of the shell companies have also been seized from the possession of the promoters,” the officer said.

“All these shell companies were controlled, managed and beneficially owned by the promoters and were actually used in the process of money laundering.”

Also read: From private jets & starry parties to hiding in Nigeria: The giant fall of the Sandesaras

Proceeds of crime ‘knowingly rotated’

According to investigators, the proceeds of crime in this case were knowingly rotated, layered, and finally integrated into the financial system and projected as untainted.

“The projected proceeds of crime were found invested in the form of immovable properties purchased in the names of shell companies such as Blue Mark Mercantile, luxury vehicles purchased in the names of promoters such as Chetan Sandesara, jewellery, watches purchased in the names of key persons such as Dipti Sandesara,” the officer said.

The loan funds too were allegedly diverted for non-mandated purposes to shell companies and later withdrawn as cash.

“Cash to the tune of Rs 140 crore was withdrawn from shell companies and was used for personal purposes of the promoters, which also include bribing of public officials. The investigation in this aspect is under process,” the officer explained.

Web in foreign lands

The investigation is also said to have revealed that the promoters created a web of corporate accounting structure abroad. They incorporated more than 100 entities in various countries including the UAE, USA, Britain, British Virgin Islands, Mauritius, Barbados and Nigeria.

The main entities outside India include Richmond Overseas, Sunshine Trust Corporation, SEEPCO BVI, SEEPCO Nigeria and Atlantic Blue Water Services Pvt Ltd.

Investigations also revealed that the funds were allegedly rotated through various structures and ultimately carried to Nigeria to finance the Sandesaras’ oil business.

Status of the accused and assets

Until now, the ED has arrested four persons in the case including businessman Dhawan, former Andhra Bank director Anup Garg; Sterling Biotech director R.B. Dixit; and Tanjeet Malik, an alleged frontman for Dhawan.

The attached assets include immovable properties, SEZ land, luxury cars, bank accounts and shares which existed in the names of flagship companies, shell companies, promoters and middlemen.

The ED has also seized more than 15 lakh documents on hard copy and in digital form.

The key directors of the company — brothers Nitin Sandesara and Chetan Sandesara — are suspected to be in hiding in Nigeria. Action under Fugitive Economic Offenders Law shall be initiated soon against the accused, an ED statement read.

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