Updated: June 27, 2020 7:47:32 pm
The Enforcement Directorate (ED) on Saturday questioned senior Congress leader Ahmed Patel in connection with a money laundering case involving the Sterling Biotech group of Gujarat. Patel was questioned at his residence after he refused to come to the ED headquarters citing Covid guidelines.
Sources said an ED team reached Patel’s residence around 11.40 am on Saturday and questioned him till evening in connection with the case wherein banks are suspected to have been defrauded of over Rs 14,000 crore by promoters of the company Nitin and Chetan Sandesara.
Sources said Patel was questioned about his links with the Sandesaras based on the statement of a witness who has claimed that he arranged parties for Patel’s son on instructions from the Sandesaras who paid for it. Sandesaras are currently hiding in Albania where they have now taken citizenship. Indian authorities are trying to get them extradited.
Reacting to the developments, Congress leader Kapil Sibal said, “If you really wanted to investigate, why don’t you investigate the names in Sahara diary, Birla diary. Some important people in these are part of the government today. Why doesn’t CBI probe them. These are all motivated issues because they want to divert attention from the problem that the country is facing today.”
Last year, the ED had questioned Patel’s son Faisal and his son-in-law Irfan Siddiqui. The duo had also been questioned on the same lines and asked about their alleged links with the witness and promoters of Sterling. On Sunday Faisal too was present at the residence, however, it was not clear whether he was questioned as well.
According to sources, the witness, Sunil Yadav who is an employee of the Sandesara Group, has told the agency that he bore “expenses of Rs 10 lakh” for a party which was attended by Faisal, “arranged” entry in a night club for him and once delivered “Rs 5 lakh” to his driver in Khan Market on the instructions of Chetan Sandesara, one of the promoters of the Vadodara-based pharma firm. Yadav told the agency that the cash was “meant for Faisal Patel”, they added.
The alleged bank loan fraud is said to have been perpetrated by the Vadodara-based pharma firm and its main promoters — Nitin Sandesara, Chetan Sandesara and Deepti Sandesara — all of whom are absconding.
The ED probe is based on an FIR registered by the CBI against the Sterling Biotech Ltd in Cotober 2017. The CBI had alleged that the group had willfully defaulted on loans of over Rs 5,000 crore from a consortium of banks led by Andhra Bank and diverted the money for personal purposes of the promoters. Since then the quantum of the case has increased to Rs 14,000 crore.
“It is revealed during investigation that the loan funds were diverted for non-mandated purposes, layered and laundered through a web of multiple domestic as well as offshore entities. The main promoters have not only siphoned off loan funds to finance their Nigerian Oil Business but also for their personal purposes,” an ED statement said last year when the agency attached foreign assets worth over Rs 10,000 crore belonging to the company.
According to ED, investigations have revealed that the group was engaged in round tripping of Standby Letters of Credit (SBLCs) funds to the tune of Rs 4500 crores by violating the conditions laid by RBI while sanctioning the loan.
“The said SBLCs were later on devolved on the guarantor Banks causing wrongful loss to these Public sector banks and to the public at large. Their strategy included incorporation of multiple shell companies, conducting circular transactions to artificially inflate turnover of flagship companies, claiming higher depreciations on non-existing machinery to avoid tax liabilities, artificial share trading with the shell companies, layering and laundering of proceeds of crime within India and abroad through the web of multiple shell companies,” the ED statement said.
The agency has alleged that Sandesaras used their employees’ names and incorporated 249 domestic and 96 offshore shell companies. “The original PAN cards, stamps, seals, Memorandum of Association and signed blank Cheque Books of shell companies have been seized by ED from possession of promoters. All these shell companies were controlled, managed and beneficially owned by the main promoters and were used in the process of money laundering,” the ED statement said.
The agency has claimed to have found that the promoters created a web of corporate and accounting structures abroad. “They have incorporated 96 entities in various countries including UAE, USA, UK, BVI, Mauritius, Barbados, Panama, and Nigeria. The main entities outside India include Richmond Overseas, Sunshine Trust Corporation, SEEPCO BVI, SEEPCO Nigeria, Atlantic Blue Water Services Pvt Ltd. Geodynamic Geospectra Limited, SAIB LLC, Goldcoin Construction etc. It is revealed during investigation that the funds were rotated through various structures and ultimately parked in Nigeria to cater to the personal interests of the main promoters,” the ED statement said.
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