The Enforcement Directorate (ED) on Saturday arrested a former Andhra Bank director for his alleged role in the conspiracy by Gujarat-based Sterling Biotech Limited and others to cheat public sector banks of ₹5,383 crore.
Former Andhra Bank director Anup Garg is suspected to have received more than ₹1.5 crore from the Sterling Biotech group. The ED is conducting the probe to ascertain whether he diverted funds through some Kolkata-based shell companies.
The money laundering probe is based on an FIR registered against Sterling Biotech group directors, their in-house chartered accountant, Mr. Garg and others.
The agency had alleged that the Sterling Biotech group companies availed more than ₹5,000 crore in loans from an Andhra Bank–led consortium of public sector banks, which later turned into non-performing assets.
As on December 31, 2016, the total outstanding debt of the companies, which include Sterling Biotech, PMT Machines Limited, Sterling Oil Resources Limited and Sterling SEZ & Infrastructure Limited, stood at ₹5,383 crore.
It had been alleged that to maximise the loans, the company directors connived with the in-house chartered accountant and falsified records of production, turnover and investments in capital assets. This was allegedly done using various entities in India and abroad.
Over 300 such entities are currently under the ED scanner.
