The law of the land seems to be finally catching up with the fraudulent and influential Sandesaras of Sterling Biotech. As per the present figures, they have cheated banks of Rs. 15,500 crores and have yet managed to run away from India in August 2018, certainly with the cooperation of the very system that helped them to dupe the banks led by Andhra Bank. These fraudsters certainly have deep links into the system. A few months ago its colluding banks and bankers, had readily agreed to settle the dues of Sterling Biotech, under a one time settlement, wholly contrary to the Reserve Bank guidelines, that do not permit such settlement with a wilful defaulter, writing off 60% of their loans. This atrocious settlement of dues of a fraudulent defaulter, raised a hue and cry and the settlement proposal was quickly rejected by the NCLT. It is in the aftermath of this uproar came the news that the CBI is now investigating every bank and banker, which approved the sanction and disbursement of loans to these cheats.
At present all criminal investigation agencies led by the CBI have swooped in on this case and for all you know the actual loans due by this dubious group to banks, which were earlier strangely reported to be only Rs. 6,500 crores and are now pegged at Rs. 15,500 cr., could turn out to be much more, as the investigations make headway. That’s because these fraudsters have managed to easily game the banking system with a godfather in Delhi, as is evident from the fact that the then all powerful Congressman Ahmed Patel’s son and son in law have had very close links with the group and are also named in a few cases.
The latest news is that the ED has managed to attach the overseas assets of the promoters of Sterling Biotech, which were acquired out of the proceeds of the giant banking fraud that they committed. The ED has attached four oil rigs and an oil field in Nigeria, four ships registered in Panama, a personal jet registered in the USA and a luxurious residential flat at London, all collectively valued at Rs. 9,778 cr. These assets were acquired by defrauding Indian banks and siphoning money overseas, through bogus transactions conducted in layers of subsidiaries and related entities. The group indulged in rampant hawala, money laundering, round tripping of funds and bogus turnover, to which bankers were a complicit witness, and thus did not object in any manner.
The fact is that the Sandesaras have easily managed to scoot away from India after committing this huge crime and are settled in Nigeria and Estonia, with family, bag, baggage and the wealth that they looted. There is no reported move about their extradition to India so far, to face the law here. But to us, more than the Sandesaras, it is the bankers who sanctioned and disbursed these loans and then let the money be siphoned away, who are the main culprits and must be stringently punished. The bankers are apparently guilty of this crime, for the following reasons :-
- Loans were sanctioned not just on the basis of bogus financial statements, but also in violation of the RBI guidelines, without adequate collateral securities either.
- Loans were sanctioned to companies that were mere paper entities with no operations.
- The funds were not used for the purpose for which they were sanctioned and yet more and more additional loans were given, instead of recalling and recovering those already disbursed.
- The bankers did not monitor the conduct of the account, usage of funds and compliance with banking regulations.
- The bankers were aware that collateral securities were not worth the value they were claimed to be, and yet gave more and more loans.
- The bankers willingly permitted the illegal siphoning of funds abroad, which they were witness to, but did not object.
- When the loans turned bad, the bankers greened the account, by giving new loans to repay the old loans.
- The bankers did not conduct any forensic audit of the loans and the borrower.
- The bankers deliberately let down their vigilance and let the Sandesaras escape from India, in as late as August 2018.
- The bankers were eager to close the scammy accounts and cover the fraud that they permitted and hence readily agreed to a settlement, with a 60% haircut, in violation of the RBI guidelines.