The CBI has registered a fresh case against the Sterling Group for allegedly cheating a consortium of banks led by Andhra Bank of over Rs 5,000 crore. The company was in news recently over a diary, which allegedly had details of payments made to government officials, IRS and IPS officers, and people associated with top politicians.
In August, the CBI had registered an FIR and arrested three Income Tax officials whose names allegedly figured in the diary. The diary was first recovered in 2011 by the Income Tax department during a raid on the company, but was not brought on record in the department’s appraisal report.
In the fresh FIR lodged on October 25, the CBI has alleged that the group’s flagship company, Sterling Biotech, in connivance with an Andhra Bank official and the in-house chartered accountant, cheated the bank of Rs 5,383 crore by falsifying company records. It further diverted the money through benami companies for “personal purposes” by the owners of the company. The loan has been declared as a non-performing asset.
“In order to avail maximum loan… the directors of M/S SBL connived with the in-house CA and in active criminal conspiracy with others falsified the material records of the company inter alia related to production, turnover and investments in capital assets using various India-based entities and entities situated abroad. On the basis of these false and fabricated documents, manipulated balance sheets were prepared to induce the banks to sanction higher amounts of loans which were later diverted for personal purposes,” the FIR says.
The FIR, registered under various sections of the Indian Penal Code and the Prevention of Corruption Act, names Sterling Biotech, its directors Chetan Sandesara, Dipti Sandesara, Rajbhushan Dixit, Nitin Sandesara, Vilas Joshi, chartered accountant Hemant Hathi and then director of Andhra Bank, Anup Garg, among the accused.
The CBI has alleged that the company even falsely represented its market capitalisation. For this, the CBI says, “the shares in India and abroad in the names of non-promoters were in fact held by the directors themselves which were concealed from the banks with the dishonest intent to cheat them.” According to CBI, manipulations were done in reporting turnover, investment in capital goods and taxes to be paid on the turnover. The bogus turnovers were in turn arrived at through bogus sales to benami companies in Dubai and India and inflated export bills.
For instance, for the year ending March 31, 2008, while the actual purchase of capital goods was worth Rs 50 crore, in the account books it was shown to be worth Rs 405 crore. “Rs 355 crore was to be diverted through group companies,” the CBI says. Similarly, while the actual turnover of the company in FY 2007-08 was Rs 304.8 crore, it was shown to be Rs 918.3 crore in IT returns and balance sheets, the FIR says.
The CBI has alleged that the group was laundering money through a circuitous route and even indulged in insider trading. As part of the conspiracy, CBI has alleged, the Sandesaras were regularly supplying money to Andhra Bank director Anup Garg in Delhi through angarias (cash couriers).