CBI vs CBI: Probing ‘public officials’ in Rs 8,000 crore Sterling Biotech case, ED tells court

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While the CBI and ED are investigating the Sterling Biotech case, this is the first time a chargesheet has been filed against the Sandesaras, who are suspected to be hiding in Nigeria. Among the 191 accused mentioned by the ED in its prosecution complaint, there are seven individuals and 184 entities. 179 of these are shell companies.

“Cash to the tune of Rs 140 crore was withdrawn from shell companies and were used for the personal purposes of the promoters which also includes bribing of public officials.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

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According to the prosecution complaint, the Sandesaras and others hatched a criminal conspiracy to cheat banks. “They manipulated figures in the balance sheets of their flagship companies and induced banks to sanction higher loans. After obtaining loans, they diverted the loans funds to non-mandated purposes through a web of shell companies. Thus, the loan funds were diverted, layered and laundered by the promoters for their personal purposes. 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 statement said. Of the Rs 8100 crore loans that were siphoned off, domestic loans accounted for Rs 3,675 crore while Rs 4,425 crore were availed off on foreign shores. As on date, banks have an outstanding of Rs 13,754 crore on the Sterling Biotech group, ED has said. The loans were availed of from a consortium of banks led by the Andhra Bank.

A senior ED officer said that the Sandesara family had become directors in a handful of shell companies while most of their shell companies had their servants and employees as directors. “Money, siphoned off from banks, was routed through these shell companies with servants as directors and received in the shell companies headed by the Sandesara family members. The money was then used to create properties in India and abroad,” the officer said.

The chargesheeted accused include Nitin Sandesara, Chetan Sandesara, Dipti Sandesara, Rajbhushan Dixit, Hitesh Patel, the family’s chartered accountant Hemant Hathi and middleman Gagan Dhawan.

“The key directors of the company Nitin Sandesara and Chetan Sandesara are learnt to be abroad. Action under Fugitive Economic Offenders Law shall be initiated soon against the accused. Red Corner Notice with respect to promoters shall also be issued,” an ED statement said.