sandesara

Let Off in India, UK Court Says There Is Strong Evidence of Fraud Against Jatin Mehta

The England and Wales High Court (Chancery Division), while rejecting the Mehtas’ plea to discharge the freeze on their assets and release their passports, opened up an extraordinary story of manipulation that has found very little mention or action in India.

Winsome Diamonds was a massive corporate default that burst onto the business world sometime in 2013 – in the same manner as Gitanjali Gems and Nirav Modi. The three are similar because their companies were huge advertisers and this got them loads of high-profile publicity, until they suddenly vanished, leaving massive defaults on the books of Indian and foreign banks.

Winsome Diamonds and its founder Jatin Mehta, with his wife Sonia and two sons Vipul and Suraj, vanished from India and have never returned, leaving behind a loan default documented at Rs 6,800 crore, but could be more.

Before I explain the half-hearted manner in which Indian investigation agencies have been following up on the case, here is the startling news. On November 22, 2022, Justice Edwin Johnson, of the England and Wales High Court (Chancery Division), said: “I am satisfied that there is a good arguable case that the Alleged Fraud, by which I mean a major international fraud, took place.” Indeed, he said, based on evidence, there was ‘strong’ evidence of a ‘major international fraud’.

The order relates to a case filed by Standard Chartered Bank UK with Standard Chartered Bank India (together referred to as SCB) alleging a US$1 billion dollar fraud that took place around 2013. Money advanced to the Winsome group was allegedly “misappropriated, laundered and concealed through multiple layers of corporate entities, with the vast majority of the proceeds said to have ended up in entities owned and/or controlled by the Mehta family in different parts of the world including the UAE,” says the order.

Also Read | Winsome, Lose Some: Jatin Mehta and the Great Rs 7,000 Crore Diamond Heist

Winsome fraud background

Around 2008, several Indian banks, led by SCB, provided bullion/gold to Winsome Diamonds and Jewellery Ltd (Winsome) and a sister concern called Forever Precious on a 270-day credit facility. In 2009, the banks also created a joint working capital consortium to lend more money to the group. By 2013, both companies began to default on their obligations. That year, the Central Bank of India’s audit report mentioned that Jatin Mehta and his family had relocated abroad and he was not returning lenders’ calls. The media reports had said that the group had removed hard disks from computers feigning a tax raid, to wipe out evidence of their laundering transactions.

It is only then that the huge scam burst into the public domain and the Reserve Bank of India (RBI) and investigation agencies slowly swung into action, after a reference from the Central Vigilance Commission (CVC) in 2014. The first few cases pertaining to a part of the Winsome group scam were registered only in 2017 by the Central Bureau of Investigation (CBI) and, in just four years (2021), it filed a closure report without making any headway. We will get to this later.

Assets freeze

In May 2022, a UK court acted on SCB’s petition and issued a ‘World Freezing Order’ (WFO) to secure assets of the value of £743,176,152.77 (or US$932,466,942.36) belonging to the Mehta family and also impounded their passports. The November order is in response to a petition to have the WFO lifted. Explaining ‘near total default’ in repayment of a billion dollars, it was argued on behalf of the Mehtas that their UAE distributor had sold jewellery to his customers and then lost the money owed to the Winsome group in commodity transactions. This explanation ‘takes some swallowing’ said the court, finding it “extraordinary that a loss on this scale could occur in this way.” The UAE distributor, Haytham Salman Ali Abu Obidah, is described as a ‘close associate’ of Jatin Mehta and listed as the fifth defendant but did not participate in the proceedings, since he could not be located!

A very detailed 403-page order, which rejected the Mehtas’ plea to discharge the WFO and release their passports, opens up an extraordinary story of manipulation that has found very little mention or action in India.

But for the SCB filing in the UK, it seems clear that the Mehtas would have quietly buried investigation and recovery proceedings in India and, perhaps, continued to operate from abroad like the Sandesara family of Sterling Biotech.

Also Read: From Gujarat to Albania and Nigeria, How the Sandesara Business Family Evaded Justice

This article cannot go into the hundreds of pages of specific detail in the UK order about how money was laundered through layers of entities, such as Al Noora (the biggest recipient), Marengo, Oriental Expressions and scores of others, many of which were liquidated after the transactions. The order also notes multiple reports commissioned by the lenders, especially SCB, to trace the flow of funds and a deal that was struck with Grant Thornton over litigation and expenses. These will be the subject matter of litigation on the WFO of the UK court that will begin later this month. What is relevant to us is what the order reveals about the lack of action by Indian regulators and investigators.

For instance, the UK court notes that, although the Enforcement Directorate (ED) had sought confiscation of the Mehtas’ properties on July 19, 2019, its ‘outcome’ is ‘unknown’ and there is “no evidence of any judgment or order made on the application.”

I had then documented how there was little effort or cohesive action by the regulators and investigation agencies to go after Jatin Mehta, despite a Rs 6,800 crore fraud, in sharp contrast to how Vijay Mallya is being pursued, despite his willingness to pay back all he owes with interest. On the contrary, CBI’s closure report of 2021 and the failure to get an Interpol alert was used by Jatin Mehta and family as arguments in their favour; but these were brushed aside by the court.

File photo of Vijay Mallya in London outside the Westminster Magistrates Court. Photo: PTI

The absconding Mehtas

While Indian lenders and investigators were hunting for the Mehta family, he was comfortably residing in the UK and had registered Diamond Distribution Co (UK) Ltd in 2016 with a Bell Street (London) address. He also had active social media accounts and, until 2016, was blogging about receiving some payment from a UAE court. The UK order reveals that the Winsome group did win some cases in UAE but they did not go into issues that have been raised in the SCB case.

The Mehtas also relinquished Indian citizenship and become citizens of St Kitts and Nevis. The court order reveals how their new address was “found by an unsolicited email sent by a journalist, which provided the names of a number of UK registered companies said to be connected to the Mehta family” (paragraph 225). Were Indian agencies really unaware of this development? The CBI’s actions would give us a clue.

CBI closure

Right until 2020, Indian investigators were putting out unsourced reports suggesting that they were still trying to pursue the Mehtas even after Interpol turned down their request for a red corner notice.

But, in uncharacteristic hurry, CBI filed a ‘lengthy’ closure report in March 2021. Typically though, the CBI report equivocated and there was no clean chit. Although the Mehtas tried to use it in their favour, the court observed, “It contains nothing which is finally conclusive one way or the other.”

On the contrary, it highlighted some damning paragraphs. For instance, the CBI said:

“Investigation revealed that all the exports were made to related parties based in UAE. Statement of witnesses recorded in group cases reveal that the control of all the UAE buyers was in the hand of Shri Jatin R. Mehta and Smt. Sonia J. Mehta. The entire functioning of 13 defaulting companies was handled by the employees of Smt. Sonia J. Mehta who was owner of M/s Oriental Expression DMCC, Noble Jewellery LLC and Oriental Jewellery LLC.”

The CBI closure also noted how employees received purchase orders from exporters on Skype calls with no details about the design, weight and specification of the product (gold). Instead, after “processing the gold the manufacturing heads of units at Chennai and Cochin used to inform the employees” of Winsome group that the consignment was ready, therefore “it give[s] rise to [a] suspicion that there was some hanky-panky going on in these two companies.”

Another factoid emerging from the order is that CBI registered 16 complaints against the Winsome group, of which “only one resulted in any charges being issued” against them.

Given that the CBI’s criminal proceedings were ‘unresolved’ but ‘closed’, the court refused to place much reliance on them. The order shows that the actions of Indian lenders are equally vague.

Reluctant Indian lenders

The Mehtas argued in the UK proceedings that 14 Indian banks of the lenders’ consortium had refused to participate in the international litigation and did not want to spend money on it, nor did they submit proof of fraud. This did not help their case either, since the judge noted that the Indian lenders’ consortium has only recovered “approximately £15,443,152.98” and the ‘true position’ of recoveries through civil proceedings in India is ‘considerably more opaque’.

In closing, it is apt to quote what the order says about the Mehtas. “It is a notable feature of this hearing that direct evidence from the Respondents is very limited. There is ample evidence from their solicitors, but very little from the Respondents themselves.” It says that they offered ‘no direct evidence’ which “provides a plausible explanation of how the movement of the funds was legitimate” through layers of companies. It says Jatin Mehta “has not taken the opportunity to set out his own account of how the Defaults came about.”

So the UK court finds there is a ‘good arguable case’ and ‘strong’ evidence of a huge international fraud, Indian investigators and lenders are apparently in no hurry to bring back Jatin Mehta and family or recover a few thousand crores owed to them!

This article was originally published on Moneylife.

IT Department Files Case Against Sterling Biotech, Sandesara Brothers

An unnamed source told Indian Express that the IT department had found 50 undisclosed foreign bank accounts and assets owned by the three entities across seven foreign countries.

New Delhi: The Income Tax department has begun action against Sterling Biotech Ltd, the pharma company promoted by the fugitive Sandesara brothers under the Black Money Act, Indian Express has reported. The CBI and Enforcement Directorate are already investigating them.

The newspaper quoted unnamed sources as having said that the IT department filed a case in the local court against the company and the brothers Nitin and Chetan Sandesara, on September 6, under sections 50 and 56 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The two sections deal with wilfully failing to furnish information on assets and income and a company’s culpability.

An unnamed source also said that the IT department had found 50 undisclosed foreign bank accounts and assets owned by the three entities across seven foreign countries.

The Sandesara brothers are considered wilful defaulters to the tune of Rs 5,000 crore and have been declared economic fugitives.

The Enforcement Directorate’s chargesheet places the quantum of loans even higher, at Rs 8,000 crore, and alleges criminal conspiracy to cheat banks.

The brothers are already being investigated by the Central Bureau of Investigation, which has booked Sterling Biotech, its directors Chetan Jayantilal Sandesara, Dipti Chetan Sandesara, Rajbhushan Omprakash Dixit, Nitin Jayantilal Sandesara and Vilas Joshi, chartered accountant Hemant Hathi, former director of Andhra Bank Anup Garg and other unidentified persons.

An Organized Crime and Corruption Reporting Project investigation also found that high-ranking Albanian and Nigerian officials helped the family evade repeated attempts to extradite them to India.

The Wire has also reported on how the brothers enjoyed connections with key members of the top brass of Indian law enforcement, to their advantage.

In 2017-18, while under active investigation, Nitin Sandesara attempted to float a string of companies in the British Virgin Islands to expand his oil business, Pandora Papers records investigated by Indian Express revealed.

From Gujarat to Albania and Nigeria, How the Sandesara Business Family Evaded Justice

Wanted in India for a Rs 5,000 crore bank default, the Sandesaras made money selling crude oil to Indian PSUs after fleeing and have cited ‘political and religious persecution’ to resist India’s feeble extradition efforts.

On a mild afternoon in March 2019, one of India’s most ostentatiously wealthy families prepared to board their private jet at Albania’s Tirana International Airport.

The Sandesaras had been on the run since 2017, when authorities in their home country accused them of defrauding local banks out of loans worth over $700 million.

That morning, the family’s troubles deepened when Albanian media broke the news that, despite their fugitive status, they had been allowed to invest large sums of money in construction projects across the country.

But none of this kept them from breezing through customs. Brandishing fresh Albanian passports they had been awarded by President Ilir Meta, three members of the family — Chetankumar Sandesara, his wife Diptiben, and his older brother Nitin — boarded their jet at about 5 pm.

Only Diptiben’s brother Hiteshkumar Patel, who was traveling on an Indian passport, was held back, although Interpol “red notices” had been issued for all four travellers.

The other fugitive Sandesaras didn’t stick around to find out what happened next. Shortly after Patel’s detention, their plane’s tracker was briefly spotted, showing they were flying over Sicily. While their final destination is unknown, the direction suggested they could be heading toward Nigeria, where the family also has citizenship and political ties, and where they are widely believed to be hiding now.

Also read: The Fall of Sterling Biotech and the Brothers Sandesara

Patel, a key figure in overseeing the sprawling Sandesara business empire, faced only moderately worse troubles in the end: Albania granted him asylum in November 2019, and he was never charged or extradited. Over two years later, he still lives freely in the country.

Long a subject of tabloid fascination, the saga of how the Sandesaras evaded justice has grabbed headlines in India for years.

An OCCRP investigation has now found that high-ranking Albanian and Nigerian officials helped the family evade repeated attempts to extradite them to India. Police reports, court documents, interviews, and flight data obtained by reporters show how these officials allowed the family to move freely and continue to run their businesses while at large.

Chetankumar Sandesara meeting with Kosovo’s then Prime Minister Ramush Haradinaj in February 2019. Photo: Facebook/Ramush Haradinaj

In Albania, where the Sandesaras and their local partner planned to pour over $33 million into construction projects, not only were some members of the family granted citizenship, but one brother was even made an honorary consul. Border data shows they have continued to visit the country freely, despite requests from India for their extradition and an ongoing money laundering investigation into their Albanian investments.

Nigeria’s attorney general has rebuffed an Indian request for their extradition, arguing that the case appeared to be politically motivated. This opinion, which prominent Indian lawyer Prashant Bhushan described as “laughable,” was also among the arguments an Albanian judge used to reject Patel’s extradition after his detention in 2019.

Documents obtained by OCCRP also show that Indian state companies continued to buy hundreds of millions of dollars’ worth of oil sourced from the Sandesaras’ Nigerian firm after the family went on the run.

Zef Preçi, executive director of the Albanian Center for Economic Research (ACER), said it was clear the family had benefited from political protection in Albania. “The fact that no one has been punished for all the advantages given to them implicates senior officials,” he said.

An Albanian police spokesperson insisted the Sandesaras were not wanted in the country or internationally and so could not be arrested. The spokesperson confirmed they were being investigated for laundering the proceeds of crime, but referred reporters to the Tirana Prosecutor’s Office.

The Prosecutor’s Office contradicted the police statement, confirming that a request to extradite the two brothers, at least, had been made. The case is still under investigation, a spokesperson said.

In a 2019 interview, Patel confirmed he was arrested because of an Interpol notice, but said it was issued for “political” reasons. Other members of the family could not be reached, and a representative did not respond to requests for comment.

A jet comes in for landing with Sandesara Group written on the side. Photo: Nishant Deshpande

A life of luxury

Nitin Sandesara and his brother Chetankumar got their start producing and trading tea before moving into the manufacture of gelatin, a product widely used in India’s generic pharmaceuticals industry.

The brothers eventually came to control some 340 companies, including 92 outside India, as they expanded into sectors as wide-ranging as energy, construction, and healthcare. Their conglomerate has claimed to be worth nearly $7 billion.

As their wealth grew, the family became a staple of the Indian tabloids, which gushed about their extravagant properties, lavish parties, and appearances with Bollywood stars. In one anecdote, Chetankumar reportedly complained to journalists when a media portal underestimated the cost of the family’s new jet.

But the Sandesaras’ fortunes shifted in the fall of 2017 when the Central Bureau of Investigation in New Delhi accused them and their company of cheating and criminal conspiracy. A subsequent investigation by the Indian government’s Enforcement Directorate claimed that their Sterling Biotech group had criminally acquired and laundered over $700 million for the benefit of its “promoters,” including the Sandesara brothers and Diptiben.

Investigators claimed that the family’s companies had obtained the money by fraudulently obtaining loans from various Indian banks. By the time Patel was detained in Albania in 2019, the amount those banks declared as fraudulent had risen to over $1.1 billion.

Much of this money was allegedly siphoned off using shell companies which listed employees and associates of Sterling Biotech as their shareholders and directors. Prosecutors say the money was transferred under the guise of asset purchases and property transactions. These transactions were also allegedly used to inflate the balance sheets of the shell companies, which then borrowed even more money from the banks and diverted those funds as well.

“Mr. Nitin Jayantilal Sandesara and Mr. Chetan Jayantilal Sandesara appointed and used employees and other associated persons of the SBL group as directors in the various shell companies to launder the tainted money,” reads a file on the investigation from the Indian government.

“The effective management and control of all the shell companies were in the hands of the actual beneficial owners” – Nitin, Chetan, and Dipti Sandesara.

Chartered accountant Hemant Sanmukhrai Hathi, one of dozens of Sandesara employees who spoke to investigators, claimed that as many as 311 out of 339 Sandesara-controlled firms were so-called “benami companies,” held in other peoples’ names but ultimately run by the family’s inner circle.

The Sandesaras are accused of using some of the stolen money to buy flashy cars and expensive properties, including a $5 million property in Hyde Park, a manor on a 10-acre plot in North London, and an apartment in Dubai Marina worth some $2 million. More funds, investigators say, were diverted to the Sandesaras’ oil business in Nigeria while the family defaulted on their loans in India.

The Sandesaras fled India before officials could arrest them. The Central Bureau of Investigation and India’s Ministry of External Affairs did not respond to requests for comment. When contacted by reporters, the ED simply shared a copy of a court order declaring the Sandesaras to be “fugitive economic offenders.”

Indian workers taking a stroll on the Dubai Marina promenade. Credit: paulk/Flickr, CC BY 2.0

Indian workers taking a stroll on the Dubai Marina promenade. Photo: paulk/Flickr, CC BY 2.0

The Albanian connection

It didn’t take long for the Sandesaras to find friends outside India.

Despite the family’s wanted status, they were swiftly granted Albanian citizenship and received their new passports in February 2018.

Then in January 2019, Albania appointed Nitin Sandesara as an honorary consul to Nigeria. (He was reported to have lost this title three months later, around the time of Patel’s detention.)

Albania’s Ministry of Tourism and Environment, led by Blendi Klosi, referenced the Sandesaras’ investments when nominating them for citizenship, citing their “commitment to the realization of important elite investments in our country.” Along with a local partner, the controversial businessman Juljan “Lul” Morina, the Sandesaras are estimated to have committed over $33 million to construction projects in Albania, including a tourist resort on the country’s most coveted coastline.

Four Albanian state institutions, including the tourism ministry, refused to respond to the OCCRP’s questions about why the Sandesaras were cleared to become citizens, saying the information was confidential. The president’s office said that the files “contain personal documents and classified documents, information that cannot be made available,” without offering further explanation.

Pëllumb Nako, former director of Albania’s Border Police, said the speed with which the Sandesaras were approved suggested they had benefited from political protection.

“It seems to me not only hasty but also abusive that all institutions have given their approval,” he told OCCRP. “It would take major power to make things move so fast, it’s not the usual procedure.”

A local friend

It’s unclear why exactly the Sandesara family has been so favoured by Albanian authorities. One reason may be their local representative, Juljan “Lul” Morina.

Morina is one of the rare Albanian businessmen who likes to display his wealth on social media, posting photos of his travels, expensive cars, and yacht (named after himself). His guests there, and at his luxurious hotel on Albania’s southern coast, include powerful politicians like Ramush Haradinaj, the former prime minister of Kosovo.

Morina swiftly rose to prominence after opening a construction company in 2005. His business grew rapidly and by 2013 he had become a sponsor for the Tirana football team. At one football game, he was photographed with the brother of Albanian Prime Minister Edi Rama.

OCCRP has also uncovered another connection between Morina and the first family: Edi Rama’s son, Gregor Rama, appears to have lived in a residential block built by Morina in an upscale neighbourhood of Tirana for more than two years.

Neighbours and a real estate agent confirmed he had lived in the 140-square-meter luxury apartment since September 2018. Edi Rama said in his asset declaration for 2019 that he paid 150,000 leke in rent for his son for the last five months of that year, the equivalent of 243 euros per month — well below the market rate of 1,000 euros a month for flats in the area where Gregor lived.

Although the asset declaration doesn’t give the address of Gregor’s flat, an OCCRP reporter saw him enter and leave Morina’s building repeatedly throughout 2020. When the reporter tried to meet Gregor to seek comment for this story, someone else turned up to the meeting. He then stopped replying to messages and calls.

Morina defended his ties with the Sandesaras to OCCRP, saying they were being “persecuted by their state for their political and religious beliefs and I strongly believe that they are honest persons.”

He declined to respond to detailed questions about Gregor Rama’s rent, saying only that “it seemed very biased to ask me who lives in one of the 50 buildings built by the company I run.”

Despite their wanted status, the Sandesaras appear to have visited Albania without any problems. A March 2019 police report obtained by OCCRP notes that officers emailed Interpol twice about Patel before he was arrested, but the family was nevertheless given clearance to enter the country. That same month, India lodged a request in Tirana for the Sandesara brothers to be extradited – again, leading to no apparent attempts to do so.

Then, in November that year, an Interpol official sent the Sandesaras’ lawyer a letter confirming that the notices for Nitin, Chetankumar, and Diptiben were being lifted. The reason was not clear, with the letter only citing an unspecified “request” they had made.

Interpol declined to comment, except to note that it has no power to compel national authorities to make arrests. “Interpol cannot insist or compel any member country to arrest an individual who is the subject of a Red Notice. Nor can Interpol require any member country to take any action in response to another member country’s request,” its press office said in a statement.

At least one Sandesara family member has continued to travel to Albania even after India’s extradition request: Border data collected by police shows the younger Sandesara brother, Chetankumar, entered the country at least three times since March 2020, including once this January.

Albania and India do not have an extradition treaty, but Arben Braçe, a senior official from Albania’s Ministry of Justice who deals with jurisdictional issues, said that India’s request should have been enough for him or his brother to be arrested.

“If they are required by the Indian state they should be handed over to the Indian state on the basis of reciprocity,” because both countries are signatories to the United Nations Convention against Transnational Organized Crime, Braçe told OCCRP. “It is enough that the offense they have committed in India is punishable in Albania as well.”

The Sandesaras’ Albanian lawyer, Xhevair Morina — the brother of their business partner “Lul” Morina — told OCCRP that Chetankumar had been coming to Albania to check on their business affairs.

Morina Palace,’ which the Julian Morina completed shortly after signing a cooperation agreement with the Sandesaras. Photo: OCCRP

But the Sandesaras’ apparent influence in Albania has not completely shielded them from scrutiny. Less than a year after the Sandesara brothers were granted Albanian citizenship, the Tirana Prosecutor’s Office opened an investigation into them and Morina for laundering money through the very investments that won them their new passports.

According to a letter sent to the Prosecutor’s Office in January 2019 by Albania’s General Directorate of Prevention and Money Laundering, the Sandesaras “benefited from loans from various banks in the Indian state using falsified documentation and then these loans were used for other purposes.”

Files from the investigation said it was looking into all activities linked to the Sandesaras in Albania. These included construction projects in Tirana and the Albanian seaside town of Himara, as well as a 15,419-square-foot plot with a preliminary permit to build a tourist resort on the desirable Dhërmi coast, and Morina’s purchase of a company called Drymades Dream.

Preçi, the director of the Albanian think tank ACER, said the Sandesaras’ investments should have been closely monitored given the money laundering charges against them in India.

“There is a well-founded suspicion of money laundering, and the fact that there was no further movement even after the scandal was discovered leads to the thought that there are implications that deserve further investigation,” he said.

The Albanian investigation was ongoing at the time of publication.

Morina confirmed he worked with the Sandesaras, but said they were currently only collaborating on building some apartments in Tirana. He said he “had no idea” that there was a money laundering investigation into the Sandesaras in Albania.

“My perception of them is that they are persecuted politically and religiously, as evidenced by the decisions of international justice,” he said.

Kosovo and Beyond

Albania isn’t the only Balkan country where the Sandesaras have friends in high places. They also appear to have played politics in Kosovo.

In February 2019, Kosovo’s then Prime Minister Ramush Haradinaj posted on Facebook that he had met with Chetankumar Sandesara, describing him as a “representative of ‘Sandesara Group’ from Nigeria,” to discuss investments in tourism and agriculture.

Then, in January 2020, Agnesa Vuthaj, a model and entrepreneur who was crowned Miss Kosovo in 2003 and Miss Albania the following year, published a Facebook post denying reports that she was in a relationship with Chetankumar Sandesara.

Instead, Vuthaj, who today runs a high-end fashion label in Pristina, claimed to have worked with the Sandesaras to help Kosovo gain recognition as a state from Nigeria.

“I have also been to Nigeria and we are working for the recognition of Kosovo by Nigeria, something that no Minister of Foreign Affairs, Prime Minister or President has done yet, despite many years of efforts,” she wrote.

The surprising claim of the Sandesaras’ involvement in this issue was backed up by their lawyer Xhevair Morina.

“They are also negotiating for the recognition of Kosovo’s independence,” Morina told OCCRP in the summer of 2019. “If you hear that Nigeria recognised Kosovo, know that this happened because of them.”

The office of Kosovo’s prime minister did not respond to requests for comment.

The Dhërmi coast in Albania, where the Sandesaras have a permit to build a tourist resort. Photo: Lisa/Flickr (CC BY-NC 2.0)

The Nigerian connection

The Sandesaras have also found shelter in Nigeria, along with lucrative business opportunities.

In 2011, the brothers’ Sterling Oil Exploration & Energy Production Co Ltd. (SEEPCO) partnered with Nigerian-owned Allenne Energy Ltd. on a concession licence to exploit an oil field worth over $3 billion. Nigeria’s then-president named Sterling as one of the country’s top 100 businesses in 2014.

The accusations against them back home do not seem to have troubled Nigerian officials. A month after they were charged in India, Nigeria’s Foreign Minister Khadija Bukar Abba Ibrahim wrote to the Albanian Ministry of Foreign Affairs asking for Nitin Sandesara to be appointed honorary consul to her country. In a letter dated November 27, she cited Nitin’s “effort to expand the friendship” between Nigeria and Albania and “the need to provide [an] avenue for boosting trade and investment relations between the two countries.”

Albanian authorities immediately began the process, and Nitin received the position in January 2019, a year after he and his brother received their Albanian citizenship.

In June 2018, Nigeria’s judiciary had also handed down a ruling that reinforced the narrative that the Sandesaras had faced persecution by Indian authorities. The decision was made as part of a suit filed by Allenne Energy to prevent information about the Nigerian oil concession from being shared with any law enforcement agencies or banks in India or Nigeria.

Allenne’s suit alleged that the Indian banks were acting with “ulterior motives” and asked the court for a declaration that the “change of government in India as well as the government policies and political and religious victimization and persecution of [SEEPCO] constitute force majeure capable of raising concerns by [Allenne Energy] in protecting its interest.”

A judge in Nigeria’s Federal High Court agreed, writing that the Sandesara brothers and their families were being “targeted by Indian government agencies” for their political and religious beliefs.

“It would be inappropriate for this court to allow any Nigerian company to be economically imperiled, because of political vendetta of Indian Government and banks,” the judge’s statement read. “Nigeria is keen on keeping and protecting the present legitimate investors and to even encourage more to come into the economy.”

Later, in 2019, Nigeria’s justice ministry made a similar argument when it rejected a request from India to extradite members of the Sandesara family, citing its power to refuse requests if it believes that the offence is “political in nature.”

An image from Sterling Oil Exploration & Energy Production Co Ltd’s website. Photo: SEEPCO

Prashant Bhushan, the prominent public interest lawyer in India, called the High Court’s decision “laughable,” and pointed out that the Sandesaras are close to a former top Central Bureau of Investigation officer, R.K. Asthana, whose daughter’s wedding was held in their farmhouse.

“Someone who is so close to Asthana cannot fear persecution by the Indian government,” said Bhushan, who in late 2017 made public a diary belonging to the Sandesaras that allegedly detailed kickbacks to top Indian officials. “A sham show is being put on to show that an attempt to extradite them is being made.”

Also read: How – and Why – the CBI’s Reputation Fell to Where It Is Now

Whether or to what extent the Sandesaras have been protected in India is a matter of debate. Indian authorities have reportedly sought to freeze over $2 billion worth of Sandesara assets as part of their investigation.

But oil shipping data provided to OCCRP also shows that state-run Indian companies continued buying Nigerian crude sourced from SEEPCO even after the money laundering charges against the Sandesaras, raising questions about how hard the Indian state and the defrauded banks are working to reclaim the money they allege the family stole.

The company has sold over $700 million of crude oil which was later bought by state-owned Indian companies since the Sandaseras went on the run, according to Sukhpal Singh, who at a much earlier time was in charge of a shipping vessel owned and operated by SEEPCO through a subsidiary.

Documents show SEEPCO sold the oil to the UK office of Glencore, a major commodities trader, which then sold it to three state-owned oil companies: Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited. That includes a shipment sold to Indian Oil Corporation that was picked up from a terminal belonging to SEEPCO in November 2020, two months after the Sandesaras were declared fugitive economic offenders.

“On paper, the supplier on the bill of lading is Glencore, but there should be no confusion that the actual supplier is Sterling Oil-Nigeria, or SEEPCO,” Singh said. Considering the information available, “it would be strange that they have apparently sought political asylum in Nigeria claiming persecution in India,” he added.

Also read: CBI Approaches Nigeria for Information on Absconding Businessman Nitin Sandesara

Singh said he even approached India’s Supreme Court last year to try to spur the state and the banks to act.

A Glencore spokesperson, Charles Watenphul, confirmed that the company had bought oil from SEEPCO that was then sold to the three state-owned Indian companies. He rejected any suggestion that Glencore had tried to disguise the origin of the oil, however, saying the trader had acted “in its own name and for its own account.”

Watenphul added that Glencore terminated its commercial relationship with SEEPCO in 2020, without specifying when.

Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited did not respond to requests for comment.

An image from Sterling Oil Exploration & Energy Production Co Ltd’s website. Photo: SEEPCO

Failed extraditions

The Nigerian court decision in the case filed by Allenne, handed down on June 8, 2018, ultimately helped the Sandesaras avoid extradition from Albania as well. A copy of both this case and the decision by Nigeria not to extradite the four family members were given to the Tirana District Court by a special envoy of the Nigerian government.

The Albanian judge who refused to extradite Patel to India after he was arrested at Tirana airport in March 2019 cited both rulings in his decision, arguing that Nigeria’s High Court had shown the Sandesara family were being targeted because of their “political and religious beliefs.”

“Nitin Sandesara and Chetan Sandesara have suffered serious political and economic persecution by India’s current government because they are recognized as persons with strong Muslim [affiliations] and strong ties to India’s [opposition party, the Indian National] Congress,” Judge Gerd Hoxha wrote.

Deepak Barot letter by The Wire on Scribd

Another file that appeared among the court documents hints at how the Sandesaras and their associates leveraged their influence behind the scenes to ensure the Albanian court would draw on Nigeria’s precedent: A letter written by SEEPCO executive Deepak Barot to the Commissioner of Police and Interpol in Abuja after Patel’s detention, urging the Nigerian authorities to “strongly and urgently” convey the Nigerian Federal High Court’s decision to Interpol Albania.

It is not clear exactly what role, if any, the Interpol offices in each country played in the letter’s submission. Interpol’s head office referred reporters to Nigerian law enforcement for comment. Interpol Nigeria and Nigeria’s national police force did not respond to requests for comment.

But one way or another, the letter made its way to the Albanian court. Once again pointing to the “political victimization and religious persecution” the Sandesaras ostensibly faced, the letter cites both Patel’s membership in the family and his Nigerian residency. The alleged fraud, it says, was in fact “a simple commercial transaction.”

Lindita Çela works at Organised Crime and Corruption Reporting Project (OCCRP). Ushinor Majumdar works at Confluence Media.

This article first appeared on the website of the Organised Crime and Corruption Reporting Project (OCCRP). Read the original here.

Ahmed Patel Questioned by ED Again Over Sandesara Brothers Bank Fraud

Patel, while speaking to reporters outside his house, said the investigators asked him 128 questions.

New Delhi: Enforcement Directorate (ED) investigators on Thursday questioned senior Congress leader Ahmed Patel at his residence for about ten hours during the third round of his grilling in connection with the Sandesara brothers bank fraud and money laundering case probe, officials said.

A three-member team of the central agency along with a few other officials reached Patel’s 23, Mother Teresa Crescent home in Lutyens’ Delhi around 11:30 am and left after 10 pm.

The team members carried files, wore masks and gloves and were seen sanitising their hands and shoes before beginning the questioning as a precautionary measure in view of the coronavirus pandemic.

Patel, while speaking to reporters outside his house, said the investigators put 128 questions to him.

“This is a political vendetta and harassment against me and my family and I do not know under whose pressure they (investigators) are working,” he said.

They (ED) told me that my questioning has completed but I say that you can question me for as many days as you want, he said.

He claimed that the agency is working on hearsay and that they have no solid evidence and that there was no money trail.

Agency sleuths have earlier questioned Patel, 70, in two separate sessions clocking about 17 hours in total on June 27 and June 30.

He was allowed questioning at home by the agency after the Congress Rajya Sabha MP from Gujarat refused to visit the ED office citing prevailing COVID-19 guidelines that discourage senior citizens from going out.

Officials said Patel’s statement is being recorded under the Prevention of Money Laundering Act (PMLA) during the latest session.

He is being questioned about his purported links with Vadodara-based Sterling Biotech Ltd. pharmaceutical company promoters, the Sandesara brothers, and alleged dealings of his family members with them.

The agency, last year, had questioned Patel’s son Faisal Patel and son-in-law Irfan Ahmed Siddiqui in this case and recorded their statements.

The two were questioned in the context of the statement of one Sunil Yadav, an employee of the Sandesara group, which was earlier recorded before the agency.

In his statement to the ED, Yadav had said that he bore “expenses of Rs 10 lakh” for a party which was attended by Faisal, “arranged” entry in a night club for him and once delivered “Rs 5 lakh” to his driver in Khan Market on the instructions of Chetan Sandesara, one of the promoters of the pharma firm, sources had said.

Yadav had told the ED that the cash was “meant for Faisal Patel”, the sources said.

The agency was also told by Yadav that Siddiqui “occupied” a house in Vasant Vihar area of Delhi that reportedly belonged to Chetan Sandesara.

This money laundering case pertains to the alleged Rs 14,500 crore bank loan fraud that is said to have been perpetrated by Sterling Biotech and its main promoters and directors – Nitin Jayantilal Sandesara, Chetankumar Jayantilal Sandesara and Deepti Sandesara – all of whom are absconding. Nitin and Chetankumar are brothers.

ED has alleged that this is a bigger bank scam in volume than the PNB fraud involving diamantaires Nirav Modi and Mehul Choksi.

The total fraud amount pegged in the PNB case is about Rs 13,400 crore.

The Sandesaras are also facing separate probes by the CBI and the Income Tax Department for their alleged nexus with some high-profile politicians and charges of corruption and tax evasion, respectively.

At present, they are stated to be based in Albania, from where India is trying to extradite them.

The ED registered a criminal case in connection with the alleged bank loan fraud on the basis of an FIR and a charge sheet filed by the CBI.

It is alleged that the company took loans of over Rs 5,383 crore from a domestic consortium led by the Andhra Bank, which later turned into non-performing assets.

Patel, while speaking to reporters on Saturday, had said he replied to the questions that the “guests” of the government posed to him.

“I am surprised that instead of fighting China … coronavirus and unemployment, the government is fighting the opposition,” he had said.

The law should be allowed to take its course and someone who has not done any wrong should not fear, Patel had said.

He had accused the government of “using probe agencies every time it faced a crisis or when there was an election”.

CBI Approaches Nigeria for Information on Absconding Businessman Nitin Sandesara

Promoter of Gujarat-based Sterling Biotech Nitin Sandesara is being probed in a Rs 5,300 crore banking fraud case and is believed to have fled from UAE to Nigera, a country with which India does not have an extradition treaty.

New Delhi: The CBI has asked the Interpol wing of Nigeria to confirm if absconding promoter of Gujarat-based Sterling Biotech, Nitin Sandesara, being probed in a Rs 5,300 crore banking fraud case, has moved to that country, officials said on Tuesday.

The move came after reports that Sandesara, along with his family members, also accused in the scam, have fled from the United Arab Emirates to Nigeria, a country with which India does not have any extradition treaty.

The agency has said it has no input on the whereabouts of Sandersara and his family members.

Following the reports, the agency has approached the Nigerian Interpol authorities to find out details of Sandesara and his family members.

Last October, the agency booked Sterling Biotech, its directors Chetan Jayantilal Sandesara, Dipti Chetan Sandesara, Rajbhushan Omprakash Dixit, Nitin Jayantilal Sandesara and Vilas Joshi, chartered accountant Hemant Hathi, former director of Andhra Bank Anup Garg and other unidentified persons.

The CBI has alleged that the company had taken loans of over Rs 5,000 crore from a consortium led by Andhra Bank which have turned into non-performing assets.

The FIR has alleged that the total pending dues of the group companies were Rs 5,383 crore as on December 31, 2016.

The directors of the company “connived with the in-house chartered accountant and falsified material records of the company”, such as production, turnover and investments in capital assets, the FIR alleged.

“This was allegedly done using various India-based entities and those situated abroad,” it said.

The company was earlier booked by the CBI in August for allegedly bribing senior Income Tax department officials.

On June 28, 2011, the IT department had conducted searches and seizures at 25 premises of Sterling Biotech Ltd, during which a diary containing hand-written records of financial transactions was found, the FIR in that case had alleged.

“Some of these names were appended with further references such as IT or Commissioner etc,” it had alleged.

In the present case, the CBI has booked all the accused for criminal conspiracy, cheating, forgery and corruption among other charges.

The CBI has alleged that false and fabricated documents and manipulated balance sheets were prepared for getting loans sanctioned from the banks which were later diverted for personal purposes.

It said that in an attempt to cheat the banks and falsely represent market capitalisation of the group companies, the shares in India and abroad in the names of non-promoters were held by directors themselves and were concealed from banks.

The CBI FIR alleged that the directors had quoted false documents under their signatures with “mala fide intention” to induce banks to sanction and release the credit limits.

“In three areas manipulation was substantial — reporting of turnover of companies, reporting of investments in capital goods (fixed assets) and taxes to be paid on the manipulated turnover,” it alleged.

(PTI)