Andhra Bank files insolvency proceedings against Sterling Biotech
Shyam Kapadia, representing the joint lender forum led by Andhra Bank, says Sterling Biotech is still running and hence they have decided to go ahead with the insolvency proceedings
Mumbai: Andhra Bank has approached the National Company Law Tribunal (NCLT) against Gujarat-based pharmaceutical firm Sterling Biotech Ltd to recover about Rs5,400 crore.
On Friday, Shyam Kapadia, representing the joint lender forum (JLF) led by Andhra Bank, argued that the company is still running and hence they have decided to go ahead with the insolvency proceedings. “The company owes more than Rs4,000 crore to the banks, while the entire Sterling Group, which has other business interests as well, owes over Rs5,000 crore to banks,” he said.
The advocate argued that the promoters have fled the country. The enforcement directorate (ED) is also conducting an investigation in the matter where the bank has alleged that the company had taken loans of more than Rs5,000 crore from the consortium fraudulently and the same became non-performing assets. The company’s default stands at over Rs5,400 crore as on December 2016.
The division bench of the NCLT presided by B.S.V. Prakash Kumar and Ravikumar Duraisamy after hearing the arguments observed that the matter requires further investigation.
The tribunal has directed the Registrar of Companies (RoC), Mumbai, to explain the intricacies of the case to the tribunal on the next date of hearing.
The tribunal has adjourned the case on 14 May.
In a separate case, in January 2018, the ED had arrested former Andhra Bank director Anup Prakash Garg in this connection under the Prevention of Money Laundering Act (PMLA). The ED had lodged the money laundering case after taking cognizance of an FIR registered by the Central Bureau of Investigation (CBI).
At the time of producing Garg in the court, the agency had said that during the probe, it came across “certain entries” in a diary seized by the Income Tax department in 2011, which showed various cash payments amounting to Rs1.52 crore made to one “Mr Garg, director, Andhra Bank” by the Sandesara brothers between 2008 and 2009.
The CBI had booked Garg, the firm Sterling Biotech, its directors Dixit, Chetan Jayantilal Sandesara, Dipti Chetan Sandesara, Nitin Jayantilal Sandesara and Vilas Joshi, chartered accountant Hemant Hathi and some unidentified persons in connection with the case.