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Judge recuses from ₹8.1K crore bank loan fraud case against Sterling Biotech owners

Nitin Sandesara   | Photo Credit: Paul Noronha

An Additional Sessions Judge (ASJ) hearing the ₹8,100-crore bank loan fraud case against the owners of Gujarat-based Sterling Biotech group and others recused himself from hearing the matter on Monday, saying he was approached by one of the parties in the case.

ASJ Dharmendra Rana said he was shocked as he was approached by one of his classmates on behalf of the accused, while terming the incident as unfortunate.

Sterling case: ED records statement of Ahmed Patel at his house

He sent all the cases related to Sterling Biotech to the district Judge, who is likely to reassign the matter before another judge. I don’t feel like pursuing the matter. It’s very embarrassing and I am recusing and posting the matter before district Judge. It’s very unfortunate that after hearing the full matter I have to recuse..., the ASJ told Additional Solicitor General S. V. Raju and Enforcement Directorate’s (ED) special prosecutor Nitesh Rana, both appearing for the agency.

The judge was scheduled to pass the order on an application filed by the ED, seeking to declare owners of the company as fugitive economic offenders under a new law. The district Judge is likely to take up the matter later in the day.

The ED had approached the court seeking to declare Nitin Sandesara, Chetan Sandesara, Dipti Sandesara and Hitesh Patel fugitives under Section 4 of the Fugitive Economic Offenders Act.

The agency has also sought immediate confiscation of the assets, in India and abroad, worth over ₹7,000 crore of the Vadodara-based business family as part of the action under the new law.

A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution.

Arrest warrants have been issued by a court against the four under the anti-money laundering law. The agency had filed a chargesheet in this case, under the PMLA, charging Sandesaras and others with money laundering and siphoning bank loans.

Investigation revealed that the promoters of the group laundered the proceeds of crime through various layers and routed the funds outside India. They incorporated more than 100 entities in various countries such as UAE, USA, the U.K., British Virgin Islands, Mauritius, Barbados and Nigeria among others.

“Their main entities outside India include Richmond Overseas, Sunshine Trust Corporation, SEEPCO BVI, SEEPCO Nigeria, Atlantic Blue Water Services Private Limited and few others,” the ED said.

It said the Sandesaras have business interests, largely in the oil sector, in Nigeria. Investigation shows that Sandesaras were engaged in oil business in Nigeria and have numerous assets there.

Their assets in that country include oil evacuation and transportation equipment such as oil blocks (Durga 1-4), barges and ships (Tulja Bhawani, Varinda) among others.

“Some of their vessels are also registered in Republic of Panama. Besides, they have immovable properties in British Virgin Islands. All these properties are sought to be confiscated under the Fugitive Offenders Act. Further investigation is ongoing to identify their other properties abroad involved in money laundering,” the ED charged.

It alleged that the pharmaceutical group and its promoters laundered funds obtained through bank loans by “incorporating” shell or dummy companies, conducting circular transactions to artificially inflate turnover of flagship companies, claiming higher depreciations on non-existing machinery, artificial share trading with the use of shell companies and layering and laundering of proceeds of crime within India and abroad through the web of shell companies.

The ED had filed a total of five chargesheets, also known as prosecution complaint, in this case and had said that apart from the Sandesaras and their associates it was probing the role of “public officials” for suspected bribery of about ₹140 crore in this case.

While the three Sandesaras were earlier reported to be based in Nigeria, Patel was said to be in the U.S. The agency has arrested four people in this case till now - Delhi-based businessman and alleged middleman Gagan Dhawan, company director Rajbhushan Dixit, ex-Director of Andhra Bank Anup Garg and an alleged aide of Dhawan, Ranjeet Malik.

Assets worth ₹4,710 crore have been attached by the ED in this case till now even as the agency said it has seized ₹15 lakh documents as part of its probe.

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Printable version | Oct 23, 2020 1:27:09 AM | https://www.thehindu.com/news/national/other-states/judge-recuses-from-81k-crore-bank-loan-fraud-case-against-sterling-biotech-owners/article32660809.ece

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