18 March 2019: Two days after the National Company Law Tribunal (NCLT) quashed the settlement plan proposed by promoters of Sterling Biotech Ltd (SBL), investigative agencies have planned to oppose the move. They are planning to file their written submission against the proposal and probe the negotiation deal.
Sandesaras, the Sterling Biotech promoters, had offered a one-time settlement of dues to the consortium of banks led by Andhra Bank.
“We are aware of the developments. The agency is certainly going to appeal against the decision. We are going to make our representation and will give a written submission ahead of the next hearing,” a senior Enforcement Directorate official told TMS.
The total credit facilities to the tune of Rs 8,100 crore availed by the Vadodara-based SBL group were declared “fraud account” by banks. The Central Bureau of Investigation (CBI), Serious Fraud Investigation Office and Enforcement Directorate (ED) are probing the case. The group’s promoters have fled the country.
The CBI had booked Sterling Biotech, its directors Nitin Sandesara, Chetan Sandesara, Dipti Chetan Sandesara and Hiteshkumar Patel, along with Rajbhushan Omprakash Dixit, Vilas Joshi, chartered accountant Hemant Hathi as well as Andhra Bank former director Anup Garg in connection with the alleged bank fraud case.
Amidst the ongoing probes, Andhra Bank had initiated an insolvency process against the company in June last year.
In January, the ED had initiated the process to extradite the four Sterling Biotech promoters, who is suspected to be in Nigeria and Italy currently.
However, in a sudden development this month, the lenders decided to withdraw the resolution proceedings against the company, and accepted the Sandesara brothers’ one-time settlement offer of Rs 5,500 crore, taking 66 per cent haircut.
“The e-voting on the resolution put to vote at the 14th meeting of the CoC of the Company concluded on Thursday, 07th March 2019… In this regard, please note the Committee of Creditors has approved the withdrawal of the CIRP of the Company with requisite majority,” the company declared in a regulatory filing.
The move by the lenders has really enraged the investigative agencies. The matter has already been informed to the Ministry of Corporate Affairs.
“This is not a plain case of bad loan. This is a case of corruption and money laundering and the lenders cannot go ahead with backdoor dealings with the fugitive promoters, while the agencies are working towards extradition. We are going to investigate the trail,” a senior ED official said.
The National Company Law Tribunal had already refused to accept the settlement plan.