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DNA EXCLUSIVE: RBI discredits three Vadodara firms as ‘fraud’ accounts

Also alleges that four common directors of Sandesara group cooked books

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In what is an extreme reproach of Vadodara-based Sandesara Group, the RBI has flagged three of its subsidiaries — Sterling Biotech Limited (SBL), PMT Machines Limited and Sterlings SEZ & Infrastructure Limited — along with its four common directors as ‘fraudsters’ for allegedly cooking financial statements and diverting funds.

Bank documents, accessed by DNA, reveal that though the forensic audit in September by Choksi & Choksi has given these three companies a clean chit; after the RBI direction on December 19, 2017, the banks declared that these companies hold fraud accounts.

The directors, meanwhile, identified as Nitin Jayantilal Sandesara, Chetan Jayantilal Sandesara, Mayuriben Hiteshbhai Patel and Raj Bhusan Omprakash Dixit have been alleged to have defaulted on loans amounting to Rs 5,363 crore taken from a consortium of banks. Now, banks claim that the directors of SBL “connived with the in-house CA in an active criminal conspiracy with others and falsified the material records of the company”. Classified RBI instructions had reported these accounts as “fraud”.

Despite irregularities in accounting right from June 2011 due to non-payment of interest and installments due to SBI, the firm first came under the RBI radar in 2016 when it observed that funds raised through Sandesara’s firms appeared to have come back to India through a circular process under FDI route in a bid to pay-off overdue in domestic banks.

On August 2, 2017, then RBI dispatched a strong letter to Sandesara Group’s bankers, questioning them about violation of the central bank directives of loans to Sandesara Group, especially the firms linked to its Nigeria-based oil business.

Several attempts to contact Sterling Sez and Infrastructure contact person, including email and SMS, did not elicit any response.

FORENSIC AUDIT

Forensic audit was initiated after SBL, in November 2015, failed to repay an installment worth $12.37 million plus interest. It managed to get a clean chit, but banks now allege that directors cooked statements to clear record

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