ED attaches foreign properties of Sandesara Group in Bank fraud case

New Delhi, Jun.26 (HS): Enforcement Directorate (ED) has attached movable and immovable properties worth Rs. 9778 Crores under the provisions of the Prevention of Money Laundering in a case of cheating and bank fraud belonging to Sterling Biotech Ltd (Sandesara Group).

Nitin Sandesara, Chetan Sandesara, and Deepti Sandesara (main promoters) have allegedly been involved in this fraud. The attached properties include 4 Oil Rigs and Oil field namely OML 143 Located in Nigeria which are held by Sterling Energy Exploration Pvt Co Ltd (SEEPCO) Nigeria, Ships namely Tulja Bhawani, Varinda, Bhavya, Brahmani etc which are registered in Panama and held in the name of company Atlantic Blue Water Services, aircraft 200 Gulf stream registered in USA held by M/s SAIB LLC and residential flat in London.

All these companies are told to be controlled by SBL. This attachment is in addition to the attachment of assets worth Rs. 4730 Cr made by the ED in 2018 which stands confirmed by the Adjudicating Authority under PMLA, in the case registered by the Directorate after CBI had registered an FIR in October 2017 for cheating and bank fraud to the tune of Rs. 5383 Crores against the said company and its promoters.

The SBL Group had obtained both Indian currency and Foreign currency Loans from Indian Banks / Lenders. The loans were sanctioned and disbursed by consortium of banks led by 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 (Sandesara) have not only siphoned off loan funds to finance their Nigerian Oil Business but also for their personal purposes. Investigations also revealed that the group was engaged in round tripping of Standby Letters of Credit (SBLCs) funds to the tune of Rs. 4500 crores by violating the conditions laid by RBI while sanctioning the loan. The said SBLCs were later on devolved on the guarantor Banks causing wrongful loss to these Public sector banks and to the public at large.

Their strategy included incorporation of multiple shell companies, conducting circular transactions to artificially inflate turnover of flagship companies, claiming higher depreciations on non-existing machinery to avoid tax liabilities, artificial share trading with the shell companies, layering and laundering of proceeds of crime within India and abroad through the web of multiple shell companies.

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 shell companies have been seized by ED from possession of promoters. All these shell companies were controlled, managed and beneficially owned by the main promoters and were used in the process of Money Laundering. It has also revealed that the promoters have created a web of corporate and accounting structures abroad.

They have incorporated 96 Entities in various countries including UAE, USA, UK, BVI, Mauritius, Barbados, Panama, and Nigeria. The main entities outside India include Richmond Overseas, Sunshine Trust Corporation, SEEPCO BVI, SEEPCO Nigeria, Atlantic Blue Water Services Pvt Ltd. Geodynamic Geospectra Limited, SAIB LLC, Goldcoin Construction etc.

It is further revealed during investigation that the funds were rotated through various structures and ultimately parked in Nigeria to cater to the personal interests of the main promoters. Investigation in still continuing in the case.