Mumbai: The Enforcement Directorate (ED) on Friday attached several movable and immovable properties worth around Rs 4,701 crore of the Sterling Biotech Group in connection with its money-laundering probe against firms of the group that are accused of allegedly defaulting on loans worth Rs 5,000 crore by a bank consortium. The group's promoters are suspected of setting up more than 300 shell firms in India and abroad to divert or misutilise loan funds, a part of which was also allegedly used to bribe unidentified public servants, according to ED officials.
The assets attached under provisions of the Prevention of Money Laundering Act (PMLA), 2002, included immovable properties of around 4,000 acres, plant machinery, around 200 bank accounts of firms and their promoters, shares worth Rs 6.67 crore and a few high-end luxury cars. "Some of the diverted loan funds were also paid to public servants, an aspect that the ED is also investigating. The ED is also investigating various cross-border transactions undertaken by the group," said an ED officer. The ED began its probe in October last year after the CBI's Delhi unit registered a case in the Rs 5,000-crore alleged bank fraud case against Sterling Biotech Ltd, its promoters, and a few others.
According to the officer, the agency achieved a breakthrough in the case when it recovered a truckload of allegedly incriminating documents that indicated the setting up of shell firms and included original chequebooks, rubber stamps, company seals, original property documents, original PAN cards, among other papers. The material was recovered from a room in Jogeshwari (east).
Several of the group firms had on the "basis of false and fabricated documents, fraudulently obtained credit facilities of more than Rs 5,000 crore from various banks, which subsequently turned into non-performing assets," said the officer.
The shell firms allegedly had dummy directors, who were/are employees of the various firms of the group, according to the ED. Bogus transactions were allegedly shown among the shell firms and a few group firms "to divert loan funds and inflate turnovers to obtain further loans from banks," said the officer.
The diverted loan funds were allegedly used to buy properties in the names of various firms, and luxury cars including Porsches, Range Rovers, Audis, Mercedes and BMWs, according to ED. The agency undertook more than 50 searches at various premises in cities including Delhi/NCR, Mumbai, Vadodara, Ahmedabad and Surat in connection with the probe.
