ED grills Ahmed Patel on bank fraud, money laundering

01:37 AM Jun 28, 2020 | FPJ Bureau

New Delhi: The Enforcement Directorate (ED) on Saturday interrogated Congress treasurer and Rajya Sabha MP Ahmed Patel(70) at his residence here on alleged money laundering in an alleged Rs 14,500 crore bank loan fraud by Vadodara-based pharmaceutical firm Sterling Biotech Group whose promoter Sandesaras fled to Nigeria in 2018.

A 3-member team of ED landed at Patel's bungalow at 23, Mother Teresa Crescent at Teen Murti, at 11.30 am, with his consent, questioned him for nearly two hours on his links with the Sandesara brothers and recorded his statement under Prevention of Money Laundering Act that has been slapped on the group's promoters.


Ahmed Patel was earlier also accused of allegedly taking a bribe of Rs 25 lakh in cash from one Ranjit Malik, a middleman of Delhi-based businessman Gagan Dhawan, who was arrested by the ED in connection with the Sterling Biotech case. Patel had described the allegations as "baseless."


An ED official said Patel was earlier twice summoned to its office here, but he excused citing the coronavirus pandemic and so an appointment was fixed to interview him. He said the money laundering case is not against Patel, but it pertains to the absconding firm promoters – Nitin Sandesara, Chetan Sandesara and Deepti Sandesara. Also holed up with them in Nigeria is another director Hitesh Patel.

He said the ED has made one of its largest PMLA attachments in this case and frozen assets worth over ₹14,000 crore of the group in India and abroad, including oil rigs in Nigeria and ships registered in Panama. He said this is a bigger scam than the Punjab National Bank (PNB) fraud involving diamantaires Nirav Modi and Mehul Choksi, pegged at Rs 13,400. ED is already trying to extradite Sandesaras from Nairobi, he claimed but reports suggest that they have a thriving business there and in contrast to the Vijay Mallya case, there does not seem to be any concerted effort to bring this bunch of promoters back to India.

Earlier last year, the ED had also questioned Ahmed Patel's son Faisal and son-in-law Irfan Siddiqui in this case and recorded their statements, on the basis of a confession by one Sunil Yadav, an employee of the group, that he bore "expenses of Rs 10 lakh" on a party of Faisal in Vadodara, arranged entry of his brother-in-law in a night club and once delivered Rs 5 lakh to Faisal's driver in Delhi's Khan Market on the instructions of Chetan Sandesara, one of the promoters.

It is alleged that the pharma company also took loans of over Rs 5,383 crore from a domestic consortium led by Andhra Bank, which turned into non-performing assets and the Central Bureau of Investigation (CBI) is separately probing it. The ED registered a criminal case last year in connection with the alleged bank loan fraud, based on an FIR and a charge sheet filed by the CBI, which had registered the loan default case on October 28, 2018.

The promoters are being probed separately by the CBI and the Income Tax Department for their alleged nexus with some high-profile politicians in both the Congress and the BJP and the charges of alleged corruption and tax evasion, respectively.

The CBI has booked Sterling Biotech's directors Chetan Jayantilal Sandesara, Dipti Chetan Sandesara, Rajbhushan Omprakash Dixit, Nitin Jayantilal Sandesara and Vilas Joshi, chartered accountant Hemant Hathi, former director of Andhra Bank Anup Garg and other unidentified people.

In a new twist, the Sterling Biotech group's shady promoters, while absconding from India, offered a 'settlement' deal to a bunch of lenders, mainly public sector banks (PSBs) and institutions. Acting through an "authorised representative," they offered to bring 10% of the one-time settlement amount and the remaining 90% will be paid over six months by a bunch of investors whom they will identify from their hiding place overseas.

On November 20 last year, the banks rejected Sandesaras' offer to repay just Rs 3,400 crore in the loans given to Sterling Biotech Ltd. The other major defaulter Sterling SEZ Ltd, and other group companies, allegedly owe the public sector banks over Rs15,600 crore.

The National Company Law Appellate Tribunal (NCLAT) had allowed the promoters' offer to pay up while absconding from the country and, despite the many criminal charges they face (including money laundering). But the NCLAT order of 18 November 2019 also stipulated that the entire payment be made within 30 days or the company will go into liquidation. The defaulter group got this extended through a Supreme Court order on December 17 up to March 31, but didn't pay up.

The politically powerful corporate group, with links across the political spectrum, is pushing banks to buy more time for them to pay up. They want banks to file an appeal before the Supreme Court against the NCLAT's 18 November 2019 order, asking for six months to complete the payment.

That such a suggestion from a failed group, with absconding promoters, is even discussed at the lenders' meeting shows how big defaulters, especially those with political connections, game the judicial system and continue to call the shots. Some lenders did suggest that the Sandesaras must be asked to prove their bona fides by depositing the money in an escrow account but nothing happened thereafter.

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