Paving way for confiscation of properties, Court declares Sandesaras fugitive economic offenders

ET had in July reported that the bank fraud case had finally reached a crucial stage after hanging fire in the lower court for nearly a year on account of “lack of clarity” over a Supreme Court order passed in July last year.

Sterling Biotech case: Delhi court declares four directors as ‘fugitive economic offenders’
NEW DELHI: Paving way for confiscation of their properties, a local Court today declared four accused, involved in the multi crore Sterling Biotech bank fraud case, fugitive economic offenders (FEO).

The four declared FEOs are: company owners Nitin Sandesara, Chetan Sandesara, Dipti Sandesara and Hitesh Patel. Passing the orders on Monday, a local Court today permitted the Enforcement Directorate (ED) to “reapproach the court for initiation of confiscation proceedings” under the FEO Act.

Additional solicitor general S V Raju, assisted by special prosecutor Nitesh Rana, appeared on behalf of ED that had sought FEO tags for the four accused.


Passing the orders, the Judge held “the conduct of the Respondents, unambiguously, establishes on record that they have left India to avoid criminal prosecution and they are deliberately avoiding to return back to India to face the instant prosecution. Thus, I have no hesitation to observe that the Respondents deserve to be declared fugitive economic offenders”.

The Court found no merit in the contention of the respondents that the non bailable warrants issued against the four is non-est. The Judge rejected the contention describing it as “meritless”.

ET had in July reported that the bank fraud case had finally reached a crucial stage after hanging fire in the lower court for nearly a year on account of “lack of clarity” over a Supreme Court order passed in July last year.
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With the top court clarifying that the proceedings against Sandesaras are not stayed, the lower court had posted the matter for final arguments by both ED and the accused to decide on whether to declare Sandesaras FEOs.

Senior Congress leader Ahmed Patel has been questioned thrice by ED over his alleged involvement in the scandal which is bigger than the Punjab National Bank (PNB) fraud allegedly committed by Nirav Modi and co-accused.

ED needed the FEO tag from the court to enable it to confiscate properties belonging to Sandesaras in India and abroad.

ED’s plea seeking the said tag from the lower court was virtually stayed since July last year after the accused had moved the Supreme Court challenging the issuance of non-bailable warrants issued against them by a lower court. In an order passed on July 2, 2019, the top court said “no coercive steps” should be taken against the accused till further orders. Armed with this order, the accused argued that they have protection from any coercive step by the agency. ED had challenged this interpretation.
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The lower court, which had last year heard arguments from both sides on the proceedings, refused to continue and asked the agency to approach the top court to get “clarification” on its (SC) order.

In March this year, the Supreme Court held, “It is made clear that the interim order July 2, 2019 passed by this Court is not intended to stay the proceedings pending before the Additional Sessions Judge”.
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In the meanwhile the Judge who had presided over the case was transferred out.

Showing urgency, the agency immediately (in March last week) moved an application in the lower court seeking to advance the hearing of its plea for FEO, and the same was allowed.

As per the statute, a fugitive economic offender is an individual against whom an arrest warrant has been issued in respect of a scheduled offence and who has fled India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution.

The Sandesaras are believed to be currently in Nigeria where they have invested in crude oil production.

In March last year, ED had filed a charge sheet accusing the Sandesaras of laundering over Rs 8,000 crore by opening 174 shell companies. A total of 195 people were charge-sheeted by the agency.

Elaborating on the modus operandi in its charge sheet, the agency had submitted that “loan funds were diverted for non-mandated purposes, necessary disclosures were not made, loan funds were withdrawn as cash, and payments were made to non-existent parties.”
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