MC: Sterling Biotech lenders receive settlement from promoter-owned company: Report

29 May 2019: Bankers have received a settlement amount from a Nigerian company belonging to the promoters of Sterling Biotech, a company undergoing bankruptcy proceedings, Moneylife reports.

The lenders have received an undisclosed one-time settlement from VELL FLO, a company whose registered address is in Lagos, through SWIFT. The details of the transaction have been sent to the NCLT and the Central Bureau of Investigation (CBI).

The report cited documents, which said that VELL FLO belongs to Sterling Biotech promoter Nitin Jayantilal Sandesara.

Moneycontrol could not independently verify the story.

Sterling Biotech’s promoters, Nitin Sandsera and Chetan Sandera, are absconding, and a Delhi court has issued an extradition order against them.

Earlier this month, the NCLT rejected a plea by Sterling Biotech’s lenders to withdraw the insolvency proceedings against the company as they were hoping to accept a one time settlement offer made by Sterling Biotech’s absconding promoters.

The report noted that the lenders were offered Rs 5,500 crore as an one time settlement by Sterling Biotech’s promoters, which is close to 40 percent of their outstanding dues. The report also noted that the promoters made a similar offer to settle dues of Sterling SEZ, another company owned by the promoters — a deal which the banks were keen to accept.

The consortium of lenders, led by Andhra Bank, are planning to contest the NCLT’s decision at the National Company Law Appellate Tribunal (NCLAT), the report added.

In addition to extradition requests, the Sandsera brothers are also facing multiple charges of fraud and are being investigated by the CBI, the Serious Fraud Investigation Office (SFIO) and the Enforcement Directorate (ED).

The Sterling Group owes Rs 15,600 crore to financial and operational creditors.

Moneycontrol reported

Categories: General News, India Bankruptcy

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