The Central Bureau of Investigation (CBI) has registered a fresh case against Gujarat-based Sansesara group company Sterling Biotech Limited, its directors, chartered accountant and the then director of Andhra Bank for allegedly cheating public sector banks of ₹.5,383 crore.
The case has been registered under provisions of cheating, forgery of valuable security, forgery for the purpose of cheating, using forged documents as genuine, criminal conspiracy and criminal misconduct.
Among those named are Sterling Biotech Limited, located in Gujarat’s Vadodara, its directors Chetan Jayantilal Sandesara, Dipti Chetan Sandesara, Rajbhushan Omprakash Dixit, Nitin Jayantilal Sandesara and Vilas Dattatray Joshi, besides chartered accountant Hemant Hathi, the then Andhra Bank Director Anup Garg and unknown private and public servants.
The FIR alleges that the Sterling Biotech group companies availed of more ₹ 5,000 crore in loans from Andhra Bank and other public sector banks, which turned non-performing assets.
Sterling Biotech is listed at Bombay Stock Exchange and National Stock Exchange. The business activities of the group companies extends to the sectors like oil, energy, port, SEZ and coal mines having operations in other countries, including Nigeria, the United Arab Emirates and the United States.
The company has availed of various credit facilities from a consortium of banks led by Andhra Bank. The total outstanding debt liabilities of the group companies, including Sterling Biotech, PMT Machines Limited, Sterling Oil Resources Limited and Sterling SEZ & Infrastructure Limited stood at ₹.5,383 crore as on December 31, 2016.
It is alleged that to maximise the loan amounts, the company directors connived with the in-house chartered accountant and falsified material records of the company, such as production, turnover and investments in capital assets. This was allegedly done using various India-based entities and those situated abroad.
“In order to falsely represent the market capitalisation of their companies, the shares in India and abroad, in the names of non-promoters, were in fact held by the directors themselves, which were concealed from the banks with dishonest intention to cheat them,” alleges the FIR.
In some loan applications, the directors allegedly quoted false statements pertaining to the company’s turnover, net profit and other details. Information on taxes to be paid was also allegedly manipulated.
The CBI alleges that the company diverted the loan amounts to the entities abroad through its group companies by adopting a circuitous route. “Benami” entities of the group were used for trading in the Sterling Biotech shares as off-market transactions.
“In a clandestine manner, the shares of Sterling Biotech and Sterling International Enterprises Limited were being traded by the Sandesaras, which is a clear cut case of insider trading and amounts to fraud on general public,” says the FIR.
The FIR notes that the Sandesaras were supplying regular money in Delhi to one Anup Kumar Garg, the then Andhra Bank Director, with the help of “hawala” operators.
The CBI had earlier in August registered a case against Sterling Biotech and three senior Income-Tax officials in connection with a 2011-searches against the group companies by the Income-Tax Department. The officials' names had figured in a diary that was seized during the searches, but was not brought on record while preparing the appraisal report.
