New Delhi: SBI Capital Markets Ltd (SBICaps), the investment banking arm of State Bank of India (SBI), is under the scanner of Central Bureau of Investigation for its role in arranging loans for Sandesara Group's oil business subsidiary.
The case pertains to cheating and bank fraud caused by Sterling Biotech Ltd (SBL)/Sandesara Group and its main promoters Nitin Sandesara, Chetan Sandesara, and Deepti Sandesara along with others.
SBI Caps was a debt syndication agency for loans to Sterling Oil Resources. Under the loan syndication assignment, SBI Caps prepared an information memorandum and shared a plan with banks on how the loan will be repaid from the earnings of the oil business. As per CBI's FIR filed in October 2017, banks under a consortium led by Andhra Bank had lent Rs 1,375 crore to Sterling Oil Resources.
CBI is mainly looking on two major aspects – on what basis SBI Caps made a lucrative offer to banks and what due diligence was done before preparing the report since the oil well on which banks had sanctioned loan was already mortgaged to Zenith International Bank of Nigeria.
SBI Caps, in its report, had projected good cash flows from the oil, and banks relied on it and sanctioned the loan for the same. "It seems the loan was taken from domestic banks to repay the loan of Zenith International Bank," a source told Zee Media.
In June this year, the Enforcement Directorate (ED) attached moveable and immoveable properties of Sterling Biotech totalling Rs 9778 crores under the provisions of the Prevention of Money Laundering Act,2002 (PMLA).
The Sterling Group owned by the Sandesara family owes a total of Rs 15,600 crore to financial and operational creditors. While Sterling Biotech owes Rs 7,500 crore, Sterling SEZ owes Rs 8,100 crore.
The ED has accused Sandesara brothers and others of hatching a criminal conspiracy and dishonestly cheating banks to obtaining higher loans. Following this, they diverted the loans funds to non-mandated purposes through a web of shell companies.