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ED discovers 174 shell firms run by Sandesara family; files charge sheet in Rs 8,100-crore fraud


twitter-logo PTI        Last Updated: October 24, 2018  | 13:31 IST
ED discovers 174 shell firms run by Sandesara family; files charge sheet in Rs 8,100-crore fraud

The Enforcement Directorate (ED) on Tuesday filed a supplementary charge sheet against seven persons in a Delhi court in the over Rs 8,000-crore money laundering case involving Gujarat-based Sterling Biotech Tech.

So far, the agency has charge-sheeted 191 accused, including seven individuals and 184 companies.

The final report, filed before Additional Sessions Judge Satish Kumar Arora, said that the accused hatched a criminal conspiracy for "dishonestly cheating banks".

The court, meanwhile, granted bail to an accused in the case -- Ranjit Malik alias Johny -- who was arrested by the agency for allegedly sending through a man named Rakesh Chandra Rs 25 lakh to a prominent senior Congress leader's residence in the national capital.

The court, which had earlier issued open-ended non-bailable warrants against pharma firm's directors, including Nitin Jayantilal Sandesara, Chetan Jayantilal Sandesara and his wife Dipti Chetan Sandesara, put up the charge sheet for consideration on October 25.

The charge sheet, filed by ED's special public prosecutors Nitesh Rana and D P Singh under the various provisions of Prevention of Money Laundering Act, accused the company of taking loans from a consortium led by Andhra Bank which had turned into non-performing assets (NPAs) or bad loans.

An "open-ended NBW" does not carry a time limit for execution unlike non-bailable warrants (NBW).

The charge sheets, filed through advocate A R Aditya, named 191 accused, which included seven individuals and 184 companies.

The accused included main promoters of Sterling Group -- Sandesaras, Rajbhushan Dixit, Hitesn Patel, Chartered Accountant Hemant Hathi and middleman Gagan Dhawan.

The companies include Sterling Biotech Ltd, PMT Machines Ltd, Sterling SEZ and Infra Ltd, Sterling Port Ltd, Sterling Oil Resources Ltd and 179 shell companies.

The charge sheet said that the accused manipulated figures in the balance sheets of their flagship companies and induced banks to sanction higher loans.

"After obtaining loans, they diverted the loans funds to non-mandated purposes through a web of shell companies.

"Thus, the loan funds were diverted, layered and laundered by the promoters for their personal purposes. Total amount of loan fraud as on date is Rs 8,100 crore. The loan frauds pertains to domestic as well as offshore branches of Indian Banks," it said.

It said that to defraud banks, the promoters devised a multi layered strategy whereby they not only duped banks but also cheated revenue department as well as share-holders.

"Their strategy included incorporation of shell companies, conducting circular transactions to artificially inflate turnover of flagship companies, claiming higher depreciation on non-existing machinery, artificial share trading with the use of shell companies, layering and laundering of proceeds of crime within India and abroad through the web of shell companies," the final report said.

It added that promoters used their employees' names and got incorporated 249 shell companies. The original PAN cards, original stamps, original seals, original Memorandum of Associations and original signed but blank cheque books of the shell companies have been seized by the ED from the possession of the promoters.

"All these shell companies were controlled, managed and beneficially owned by the promoters and were actually used in the process of money laundering," it said.

It added that the proceeds of crime were knowingly rotated, layered and finally integrated into the financial system and projected as untainted.

"The so projected proceeds of crime were found invested in the form of immovable properties purchased in the names key persons such as Dipti Sandesra etc.," it said.

It added that the loan funds were diverted for non-mandatory purposes to shell companies and were withdrawn as cash. It claimed Rs 140 crore in cash was withdrawn from shell companies and were used for the personal purposes of the promoters which also included bribing of public officials. The investigation in this regard is under process.

Besides Malik, the ED had earlier arrested Dhawan and a former director of Andhra Bank, Anup Prakash Garg in the case. Both are out on bail.

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