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THE STERLING BIOTECH FRAUD

Sandesaras

The fugitive Sandesaras, the dubious promoters of the Sterling Biotech Group, which has duped banks of over Rs.8100 crores (it could be much more), and who have run away to Nigeria, which has no extradition treaty with India, where they have established a huge asset base, built by looting banks in India, has had companies and offices at British Virgin Islands, Liechenstein, Seychelles, Dubai and China and whose overseas assets have included oil rigs, offshore oil blocks and infrastructure for oil evacuation and transportation; yet in India, the company addresses of this asset loaded multinational group, were located in a chawl, a slum, in vacant buildings, as also in buildings that did not exist at all. And none of the lending banks either verified it, or if they were aware, they raised no alarm whatsoever. It is from these fake offices that the Group ran a ‘flourishing’ business, that convinced bankers to lend them thousands of crores of rupees. These bogus addresses/offices were the key element in their modus operandi to cheat banks and finally run away from India so easily, since a bogus address means that the person cannot be found at the given address.

The Enforcement Directorate has investigated this banking fraud, and has found the modus operandi to be not complex, but rather simple and it yet went undetected for many years. It says that the Sandesaras would apply for loans from banks on the basis of manipulated figures, they would incorporate shell companies in India and abroad, by indulging in bogus circular trading which was merely on paper between these shell group companies, they would show huge turnover and profits, but would pay no taxes by claiming depreciation write-offs in fake investments in plant and machinery etc. and would thereafter siphon away the bank loans into personal assets including real estate, high end cars etc. They eventually managed to siphon away such money abroad, before the entire family scooted away. Interestingly, despite the running away from India, of the likes of Vijay Mallya and Nirav Modi, after committing huge bank frauds, no authority was on any alert and the Sandesaras easily managed to flee from India, just a couple of months ago.

Such kind of blatant frauds and the easy escape of the fraudsters, is not possible unless the entire system colludes with them. The Sandesars fraud saga has involved top bureaucrats, bankers and politicians, without whose support such a blatant fraud was just not possible. In an income tax raid conducted on the Sterling Biotech Group a few years ago, direct incriminating evidence was found of not just huge bribe payoffs to top ranking bureaucrats, but also of the investment of many babus/netas in their Group Companies. And despite that all of them have gone scot free, which explains the ease with which the Sandesaras ran away from India. The sad irony is that in such cases, it is the system that protects the fraudster and eases his exit from India, because if such a fraudsters sang like a bird, the entire system would be shaken up, and the big fishes would be caught in the net.

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