The Enforcement Directorate (ED) has attached properties worth ₹9,778 crore in a case of cheating and bank fraud committed by Sterling Biotech Ltd (SBL) and the Sandesara Group. This includes four oil rigs and the oilfield OML 143 located in Nigeria,held by Sterling Energy Exploration Pvt Co Ltd (SEEPCO).

The main promoters of the company — Nitin Sandesara, Chetan Sandesara and Deepti Sandesara — have been accused of siphoning bank loans for personal purposes, diverting them to their oil business in Nigeria and violating RBI rules, said an ED statement.

Ships registered in Panama and held in the name of Atlantic Blue Water Services, a business jet registered in the US and held by SAIB LLC, and a residential flat in London have also been attached.

Last year, the ED had attached ₹4,730-crore worth of properties after a case was registered by the CBI in 2017 for cheating and bank fraud to the tune of ₹5,383 crore against the company and its promoters.

SBL had obtained loans in Indian and foreign currencies from a consortium of lenders including Andhra Bank, UCO Bank, State Bank of India, Allahabad Bank and Bank of India. “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,” the ED stated.

Multiple violations

Investigations also revealed that the group was engaged in round-tripping of standby letters of credit (SBLCs) funds to the tune of ₹4,500 crore, violating RBI norms. The SBLCs later on devolved on the guarantor banks. The promoters’ strategy included incorporation of multiple shell companies, conducting circular transactions to artificially inflate the turnover of flagship companies, claiming higher depreciations on non-existent machinery to avoid tax liabilities, artificial share trading with the shell companies, and layering and laundering of the proceeds of crime in India and abroad through a web of shell companies.

ED investigation has also revealed that the promoters 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 the shell companies have been seized by the ED from the promoters.

The loan funds were diverted for non-mandated purposes, layered and laundered through a web of multiple domestic and offshore entities, said an ED statement

 

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