5 June 2019: Bank of India (BoI) has declared Sandesara brothers, the absconding promoters of Sterling Biotech as wilful defaulters. The group, which has two companies Sterling Biotech based in Bandra focusing on pharmaceuticals and Sterling Global Oil Resources in Nigeria, borrowed about Rs 15,000 crore from a clutch of 37 domestic banks.
The bank in an advertisement put out on Tuesday said that the company directors Nitin Jayatilal Sandesara and Chetan Jayantilal Sandesara are declared as wilful defaulters for not repaying cash credit and term loans of Rs 124.79 crore. The loan was availed in June 2009 from BoI’s Nariman Point large corporate branch in Mumbai.
In a separate statement, BoI also declared Nitin Sandesara a wilful defaulter for not repaying another loan of Rs 113.69 crore borrowed by his company Sterling Global Oil Resources, which is based in Nigeria.
“Internal investigations on this loan sanction are on,” said a banker at BoI.
In March 2018, the government had admitted in the Lok Sabha that some 31 top economic offenders had fled the country, including the Sandesara brothers.
Lenders, led by Andhra Bank, are trying to seal a settlement with Sandesara brothers that involved a 65% haircut on the loans. An unknown representative of the company had come forward to settle about Rs 3,100 crore dues of the company. However, National Company Law Tribunal (NCLT) last month ordered Sterling Biotech, which had about 800 employees on its rolls, to be liquidated. However, National Company Law Appellate Tribunal (NCLAT) stayed the liquidation process and posted the case for hearing on July 16, 2019.
NCLT had raised doubts on the one-time settlement offer, which gave a huge advantage to the promoters to settle the debt at a huge discount and get back their company.
The admitted claims of the lenders in the court were a little over Rs 9,000 crore. However, the order was stayed by NCLT. BoI is one among the 37 banks that have lent to the group.
Enforcement Directorate, which is probing the case, has already attached properties of the company, both in India and overseas.