In one of its biggest attachments, the Enforcement Directorate on Friday attached assets worth over Rs 4,700 crore of Sterling Biotech Group and is holding firm Sandesara Group in the Rs 5000-core bank fraud case. The ED had registered the case in October last year. The attachment amount is the second highest so far this year after the Nirav Modi-Mehul Choksi bank fraud case.
The agency said it issued a provisional order under the Prevention of Money laundering Act (PMlA) and attached immovable properties of around 4,000 acres, plant and machinery, around 200 bank accounts of various linked companies and promoters, shares worth Rs 6.67 crore and a number of luxury cars of the Vadodara-based group.
It said “cross-border transactions” undertaken by the Sterling group were under probe and the ED was mulling approaching foreign jurisdictions to seize several oil rigs, barges and oilfields in Nigeria, for which the group had invested, and about 50 overseas bank accounts of the company. The ED in a statement said it also attached Sandesara house in Juhu, Mumbai, a farm house in Ambad in Jalna district of Maharashtra, a company office in Atladara in Vadodara, and a factory in Ooty in Tamil Nadu.
Earlier this year, the ED had frozen properties worth Rs 7,600 of diamantaire Nirav Modi, his uncle Mehul Choksi and their associates under the stringent PMlA.
The agency had registered a money laundering case against the Sterling group and its absconding promoters Nitin and Chetan Sandesara in October last year, taking cognisance of a CBI FIR on charges of alleged corruption, the ED said. It had then conducted about 50 searches at various locations in the country including Mumbai, Vadodara, Ahmedabad and Surat.
A number of senior bureaucrats, including high-ranking Income Tax department officers, are under the scanner of the ED as it said it suspects that “some of the diverted loan funds were also paid to public servants”. Even CBI’s Special Director Rakesh Asthana’s name was figured in the pay-off diaries of Sterling Group.
The probe agencies had alleged that the firm and its absconding promoters, on the “basis of false and fabricated” documents, had fraudulently obtained credit facilities of around Rs 5,000 crore from various banks, which subsequently turned into non-performing assets (NPAs).
“The loans were sanctioned by a consortium of banks like the Andhra Bank, the UCO Bank, the State Bank of India, the Allahabad Bank and the Bank of India. Till date, the banks have declared as fraud, various outstanding loan accounts to the tune of about Rs 5,000 crore 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 ED said.
It said the funds of loan amount were allegedly diverted and used to purchase a fleet of luxury cars such as Porsche, Range Rover, Audi, Mercedes and BMW.
The firm’s promoters withdrew about Rs 140 crore in cash from bank accounts of various shell or benami companies for personal use such as purchase of jewellery, the agency said. At least 300 shell or benami companies, which were allegedly used to “divert and misutilise loan funds”, are under the scanner, it said.
The agency has arrested three people so far in this case — Delhi-based businessman Gagan Dhawan, former Andhra Bank director Anup Garg and Sterling Biotech ltd director Rajbhhushan Dixit.