The Enforcement Directorate (ED) on Friday, after a seven month long probe, attached several movable and immovable properties worth more than Rs. 4,700 crores in connection with the Sterling Biotech group bank loan fraud case.
The properties were attached under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The crackdown was carried out on the basis of an FIR that was registered in October 2017 against the Vadodara-based Sterling Biotech Limited.
The attached assets include nearly 4,000 acres of properties, luxury cars, nearly 200 bank accounts of various companies and shares worth more than Rs. 6.50 crores.
It is alleged that Sterling's promoters, on the basis of false and fabricated documents, fraudulently obtained credit facilities of more than Rs. 5,000 crores from various banks, which subsequently were turned into Non-Performing Assets (NPAs).
During the investigation, the Special PMLA Court issued non-bailable warrants against the company's promoters Nitin and Chetan Sandesara.
The probe revealed that the promoters set up more than 300 shell and benami companies in India and abroad to divert and misutilise 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 indicate 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.
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 cheque books, 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.
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 group.
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.
So far, the ED has arrested Delhi based businessman Gagan Dhawan, former Andhra Bank director Anup Garg and Sterling Biotech Ltd. director Rajbhushan Dixit.