SC tells SEBI to close Sandesara Brothers’ case
The Supreme Court told market regulator Securities and Exchange Board of India (SEBI) on Thursday to close proceedings against Sterling Biotech Limited (SBL) and its promoters, Chetan and Nitin Sandesara, or else it will be compelled to take a serious view of the matter.
A bench of Justices JK Maheshwari and AS Chandurkar told the SEBI’s counsel that its order of November last year was very clear that all proceedings against the Sandesara brothers will be quashed if they deposit Rs 5,100 crore in the apex court registry.
“We have said all proceedings, including that of SEBI, need to be quashed upon deposit of the money. If you are doing it, then it is alright, or we will be compelled to pass a detailed order on the issue,” the bench told the counsel.
The SEBI’s counsel said Solicitor General Tushar Mehta is deliberating with the market regulator and sought a week’s time to apprise the court of the developments.
Senior advocate Mukul Rohatgi, appearing in the court for the Sandesara brothers, said the SEBI has till now refused to close the proceedings and that it has to take a call on the issue of quashing the proceedings in compliance with the apex court’s order.
The bench posted the matter for further hearing on April 10 and noted that Mehta, who is in deliberation with the SEBI on the issue, will apprise the court of the developments on the next day of hearing.
The SEBI is probing allegations that the promoters of SBL had secured loans from foreign banks and routed funds into the company as purported investments that could mislead investors and distort the true financial position of the company.
On November 19 last year, the top court accepted a settlement proposal under which the Sandesara brothers agreed to deposit Rs 5,100 crore as a full and final settlement of claims arising from these proceedings.
The amount was deposited in the court registry in December 2025, following which the court gave effect to its earlier order for quashing of proceedings.
Last month, a consortium of secured lenders, including banks of the SBL of promoters Chetan and Nitin Sandesara, moved the top court for the disbursal of their claim amounts from the Rs 5,100 crore deposited in the apex court registry, while highlighting that their total outstanding against the business group’s companies was Rs 19,283.77 crore.
The banks, which are 20 in number of the 26 secured creditors of the SBL, placed on record a consolidated computation of claims across multiple group entities and setting out the methodology adopted for the distribution of the amount.
The application of the consortium, however, stated that a few lenders are yet to formally confirm their acceptance, although their dues have been computed on the same basis.
On March 25, the bench noted that the total lender banks are 26 in number and out of the said list of banks, serial numbers one to 20 have submitted their claims and all relevant documents proportionate to their respective shares that have been specified in the chart.
It noted that six banks have not submitted the formal affidavit and required documents, including Krung Thai Bank Public Company Limited (Singapore), Hua Nan Commercial Bank (Singapore), Taiwan Co-operative Bank, The Shanghai Commercial and Savings Bank Limited, HDFC Bank and Aviral Maritime Infra.
“Thus, retaining the share with respect to their claims, the amount of the banks at Serial Nos. 1 to 20 be released immediately in terms of column 5 of Annexure A-4,” the bench had said, adding that the interest accrued on the deposit lying with the bank with respect to the sum of the lender banks at serial numbers one to 20 be also proportionately distributed to them in accordance with the share of their claims.
It had further said that the amount with respect to the banks at serial numbers 21 to 26, which is retained, shall be kept in a fixed deposit on an auto-renewal basis separately and distributed on the submission of their claims.
“The interest accrued on the sum of the remaining six banks be also kept in fixed deposit, in addition to the amount of their proportionate share,” it had said.
On the SEBI’s proceedings against the Sandesara brothers, the top court on March 23 said the solicitor general may seek instructions on the issue and also on the closing of every other issue.
The banks had earlier told the court that the lenders had decided to aggregate all domestic and foreign currency exposures, convert foreign loans into rupees at a fixed exchange rate of `63 per US dollar — reflecting the average rate in 2015, when most accounts turned non-performing — and apply a uniform interest rate of 9 per cent per annum from the date of NPA, with annual rests.
The banks had further told the court that after applying this methodology, the total admitted dues across all accounts were computed at Rs 19,283.77 crore and the amount of Rs 5,100 crore deposited pursuant to the court’s earlier order was proposed to be distributed proportionately based on each lender’s share in the total dues.
The legal dispute arose from a batch of petitions filed by the Sandesara brothers seeking the quashing of multiple proceedings, including FIRs registered by the CBI, ED, and cases registered under the Fugitive Economic Offenders Act, Companies Act and Black Money Act.
