Updated: October 9, 2021 8:46:15 am
In 2017-18 when investigating agencies were busy probing criminal cases against Nitin Sandesara and his group Sterling Biotech for an alleged bank loan fraud of over $2.1 billion, Sandesara, who had fled India, was busy collecting character certificates from Nigerian banks and solicitors to float a string of companies in the British Virgin Island (BVI) to expand his oil business, Pandora Papers records investigated by The Indian Express show.
“We consider Nitin Jayantilal Sandesara as being financially reliable and of good moral standing from our dealings with him,” said Union Bank of Nigeria Plc in a February 2018 reference letter to Fidelity Corporate Service Ltd. Another letter of March 2018 from Nigerian law firm EI Alosiba & Co said, “We have known Nitin Sandesara for 15 years and that he has never to the best of our knowledge and belief, been involved in bankruptcy, criminal or similar proceedings.”
These letters were used by Sandesara to set up at least half a dozen companies in the BVI: Constant Capital and Investment Ltd; Prime Finance and Capital Alliance Ltd; Sterling Petroleum Trading Ltd; West Africa Capital Limited; African Capital Alliance Ltd and Continental Capital Alliance Ltd.
Multiple emails to Nitin Sandesara did not elicit any response.
The purpose of these companies, according to records, was to invest in oil and gas firms in France, Nigeria, UK, UAE and India.
Records show Nitin Sandesara is the sole beneficial owner of these firms and he has declared that the funds infused in these companies are his “savings”.
A majority of these companies have been set up with an initial investment of $0.5 million and have an identical projection of revenues of $3 million in the first year of operations.
🗞️ Read the best investigative journalism in India. Subscribe to The Indian Express e-Paper here.
Company records show that West Africa Capital was set up on November 8, 2017 with Nitin Sandesara as its sole owner holding 50,000 ordinary shares of a single class with a par value of $1 each. The very next day, Sandesara opened another firm called African Capital Alliance with an identical shareholding.
At least, two firms Constant Capital and Prime Finance were incorporated on the same day, March 16, 2018, with Sandesara holding 50,000 shares of $1 each in these companies.
Interestingly, both the firms said that they plan to do business in India, among other countries. This despite the fact that Sandesara and his family were already on the run as Indian investigative agencies were probing them for bank fraud.
While incorporating Constant Capital and Prime Finance, the corporate service providing agency, Fidelity Corporate Services, repeatedly asked Sandesara to provide a “police clearance certificate from India” to complete the know-your-customer norms for the newly formed BVI companies.
Sandesara did not submit this. Instead, he transferred Constant Capital and Prime Finance from Fidelity Corporate to another corporate services provider Sable Trust Limited in the BVI in April 2018.
Interestingly, all these firms set up by Sandesara between November 2017 and April 2018 have escaped investigation by both the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) that are probing the Sterling Group, Sandesara, his brother Chetan Sandesara for the alleged bank fraud of over $2.1 billion.
Sandesara and his family fled India in 2017 after their business came under the scanner. In September 2020, India declared Nitin and Chetan Sandesara and Dipti Sandesara as fugitive economic offenders.
Investigation by agencies has found the Sandesara brothers allegedly diverted the loan obtained by Sterling Group for non-mandated purposes, layered and laundered it through a web of multiple domestic as well as offshore entities. The ED has alleged that the Sandesaras used their employees’ names and incorporated 249 domestic and 96 offshore shell companies.
According to the ED, the group was engaged in round-tripping of borrowed funds to the tune of $600 million by violating conditions laid by the Reserve Bank of India (RBI) while sanctioning the loan. So far the agency has attached assets worth $1.93 billion in the case.
ED had in June last year questioned former Congress leader Ahmed Patel in connection with the case against Sandesaras. Patel was questioned about his links with the Sandesaras based on the statement of a witness who claimed that he arranged parties for Patel’s son on instructions from the Sandesaras who paid for it.
At present, the Sandesaras are reportedly in Albania where they are said to have taken citizenship.
Even as Indian authorities are trying to get them extradited, the Sandesaras have proposed a one-time settlement offer of a measly $350 million to Indian lenders for loan defaults of $2.1 billion.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.