Supreme Court allows Sandesara brothers to settle $1.6-billion fraud case

Supreme Court has agreed to drop criminal proceedings against billionaire brothers Nitin and Chetan Sandesara if they pay one-third of the dues owed in a $1.6-billion bank fraud case. The order, made public on Friday, marks a potential turning point in how large financial frauds are resolved in India.

According to the court order, accessed by Reuters, the Sandesara brothers’ counsel, Mukul Rohatgi, informed the bench that his clients were ready to pay about $570 million as settlement “to get rid of all proceedings.” The apex court has set December 17 as the deadline for payment. Once the payment is made, the court may quash the criminal charges against them.

The Sandesara brothers, whose business interests range from pharmaceuticals to energy, were accused of defaulting on loans from several Indian banks. They left India in 2017, obtaining Albanian passports, and have since denied any wrongdoing. Indian authorities have designated them among 14 “fugitive economic offenders” under a 2018 law that enables the seizure of assets belonging to those accused of major financial crimes.


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Other individuals under this law include Kingfisher Airlines founder Vijay Mallya and diamond trader Nirav Modi, both of whom also deny the allegations of bank fraud.

The Sandesaras control Sterling Oil Exploration and Energy Production Company in Nigeria, which, according to its website, contributes about 2.5% of the country’s federal revenue. India’s federal crime agency accused the brothers of orchestrating a $1.6-billion bank fraud, though they have maintained their innocence.

Legal experts say the ruling could set a precedent for other economic offenders seeking to settle criminal charges through partial payments. Supreme Court lawyer Debopriyo Moulik told Reuters, “This is very similar to the approach adopted in foreign countries where fines are an alternative to facing trial.” However, such settlements could leave Indian lenders unable to recover the full amounts owed.