Enforcement Directorate
Enforcement Directorate

ED files chargesheet against Sterling Biotech director

ANI | Updated: Jul 19, 2018 00:48 IST

New Delhi [India], Jul 18 (ANI): The Enforcement Directorate (ED) on Wednesday has filed a chargesheet in the Patiala House Court against the director of Vadodara-based Sterling Biotech Limited, Rajbhushan Omprakash Dixit, in a bank loan fraud case of over Rs 5,000 crore.
Last year, the Central Bureau of Investigation (CBI) had registered an FIR for bank loan fraud against Sterling Biotech Ltd, its group companies, its directors and others.
Sterling Biotech Ltd is promoted by Nitin Sandesara and Chetan Sandesara, who have reportedly fled abroad to escape proceedings in India.
The Enforcement Directorate has also obtained Non-Bailable Warrants (NBW) from a Special PMLA court, against several absconding persons, including Nitin Sandesara and Chetan Sandesara.
Following the FIR, the agency in June attached several movable and immovable properties worth more than Rs. 4,700 crores under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
"ED had arrested Rajbhushan Dixit in January on the basis of an NBW issued against him by a Special PMLA court on ED's application. This is the third prosecution complaint filed by ED in this matter. The agency had earlier filed prosecution complaints against a Delhi-based businessman Gagan Dhawan and ex-Director of Andhra Bank, Anup Garg" said an official statement released by the agency.
ED has found, during the investigation that several companies promoted by the Sandesara brothers, had fraudulently obtained credit facilities of more than Rs 5000 Crores from various banks, which subsequently turned into Non-Performing Assets (NPAs).
The loans were sanctioned by consortium of banks led by Andhra Bank, UCO Bank, State Bank of India, Allahabad Bank and Bank of India. Till date, the banks have declared as fraud, various outstanding loan accounts to the tune of about Rs 5000 Crores in respect of various companies of Sterling Group, including Sterling Biotech Ltd., Sterling Port Ltd., PMT Machines Ltd., Sterling SEZ and Infrastructure Ltd and Sterling Oil Resources Ltd.
The probe revealed that the promoters set up more than 300 shell and benami companies in India and abroad to divert and misuse loan funds, manipulate balance sheets and fudging other documents to inflate turnovers and insider shares trading.
The Sandesaras reportedly controlled these shell and benami companies through dummy directors, who were shown as employees of various companies of the Sterling Group.
Information available in the public domain indicates that bogus sale/purchase was shown between the benami companies and the Sterling Group of companies to facilitate diversion of loan funds and inflate turnovers to obtain further bank loans.
These loans were then rotated in multiple layers through various shell and benami companies to conceal the original source from where funds were collected.
As per ED's complaint, Rajbhushan Dixit was instrumental in setting up and management of such benami companies which were used for siphoning loan funds and he was paid around Rs. 2.5 Crores by Sandesaras using the bank accounts of such benami companies. The ED is still investigating whether any more payments were made to him by Sandesaras.
The siphoned off loan funds were used to buy properties in the names of various companies, to purchase shares of Sterling Biotech Ltd and Sterling International Enterprises Ltd to attract investors. Some of the diverted loan funds were also paid to public servants. The Enforcement Directorate is also investigating various cross-border transactions undertaken by the group.
The Enforcement Directorate achieved a major breakthrough in the case when it recovered truckloads of material from a room in the Jogeshwari area of Mumbai that provided information on how various shell and benami companies were formed and managed. The seized material included original chequebooks, rubber stamps, company seals, original property documents, original PAN cards, and more than 10 lakh pages of other incriminating documents.
In total, the Enforcement Directorate has carried out more than 50 searches at various premises in several cities, including Delhi-NCR, Mumbai, Vadodara, Ahmedabad and Surat.
It is being reported that over 50 foreign bank accounts and several other assets and properties situated abroad linked to the Sterling Group are under the ED's scanner. (ANI)