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{{Short description|Financial fraud in India}}

{{Financial risk types}}

'''Sterling Biotech bank loan case''' is a major financial scandal in India involving the diversion of bank loans and money laundering by the promoters of Sterling Biotech Limited, a [[Vadodara]]-based pharmaceutical company. The case, one of the largest bank frauds in the country's history, involved alleged defaults and siphoning of funds {{INRConvert|8100|c|year=2017}} crore through a network of shell companies.<ref>{{Cite web |last= |date=2025-11-25 |title=A timeline of the Sterling Biotech fraud case |url=https://insolvencytracker.in/2025/11/25/the-sterling-biotech-fraud-case-a-timeline-of-indias-major-bank-fraud-case/ |access-date=2025-12-03 |website=Insolvency Tracker |language=en-US}}</ref>

In April 2026, the [[Supreme Court of India]] approved a full and final settlement proposed by the promoters. Pursuant to the settlement, the promoters paid a cumulative total of approximately {{INRConvert|9800|c}} to the secured lender banks and into the Supreme Court registry. The Court directed that all related criminal, regulatory and civil proceedings be quashed, and the matter was formally closed on 15 April 2026.<ref name=":1">{{Cite web |date=2026-04-15 |title=SC concludes Sterling Biotech case after Rs 9,800 crore recovery |url=https://www.financialexpress.com/business/news/sc-closes-sterling-biotech-case-after-rs-9800-crore-recovery/4208239/ |access-date=2026-04-22 |website=The Financial Express |language=en}}</ref>

== Background ==
Sterling Biotech was founded in the 1990s as a pharmaceutical manufacturer, promoted by Nitin Sandesara, Chetan Sandesara, and Dipesh Patel. The company, listed on the both Indian stock exchanges, was into manufacturing of [[active pharmaceutical ingredients]] from their facilities in [[Gujarat]]. By the mid-2010s, it had expanded into [[special economic zone]]s and other ventures under the Sterling Group, including Sterling SEZ and Infrastructure Limited.

The controversy around the company centres on big-ticket loans taken from a consortium of public sector banks led by [[Andhra Bank]] (now merged with [[Union Bank of India]]). Between 2008 and 2016, the group secured credit facilities exceeding {{INRConvert|8100|c|year=2008}} for expansion projects. Investigations revealed that these funds were later diverted through fabricated documents, inflated project costs, and a web of over 249 domestic and 96 offshore shell entities in countries including [[Nigeria]], [[United Arab Emirates]], [[United Kingdom]], [[British Virgin Islands]], [[United States]], [[Mauritius]], [[Panama]], and [[Barbados]].It was also revealed during the investigation that the promoters used employees to incorporate these entities, round-tripped standby letters of credit worth {{INRConvert|4500|c|year=2017}}, and laundered proceeds via [[Benami Transactions (Prohibition) Act, 1988|''benami'']] transactions.<ref name=":0" />

Early red flags emerged in 2005 when [[Securities and Exchange Board of India]] probed share dealings by Sterling Biotech and Sterling International Enterprises Limited (formerly Transworld Infotech Limited) for suspicious trading patterns from August to September 2005. Promoters were accused of concealing ''benami'' entities and pressuring regulators to stall the inquiry.<ref name="Yadav">{{Cite news |last=Yadav |first=Yatish |date=2019-12-18 |title=Sterling Biotech fraud case: Rift between probe agencies, banks wide open; company promoters tried to stall SEBI investigation-Business News , Firstpost |url=https://www.firstpost.com/business/sterling-biotech-fraud-case-rift-between-probe-agencies-banks-wide-open-company-promoters-tried-to-stall-sebi-investigation-7797931.html |archive-url=http://web.archive.org/web/20220625013659/https://www.firstpost.com/business/sterling-biotech-fraud-case-rift-between-probe-agencies-banks-wide-open-company-promoters-tried-to-stall-sebi-investigation-7797931.html |archive-date=2022-06-25 |access-date=2025-12-03 |work=Firstpost |language=en-US}}</ref> By 2017, the loans turned [[non-performing assets]], prompting complaints from banks.<ref>{{Cite news |date=29 October 2017 |title=CBI FIR against Sterling Biotech for Rs 5000 cr loan default |url=https://www.newindianexpress.com/business/2017/Oct/28/cbi-fir-against-sterling-biotech-for-rs-5000-crore-loan-default-1685563.html#:~:text=CBI%20FIR%20against%20Sterling%20Biotech,as%20on%20December%2031%2C%202016. |access-date=3 December 2025 |work=[[The New Indian Express]]}}</ref>

== Investigations ==
Investigations began in 2017 following bank complaints:

* [[Central Bureau of Investigation]]: Registered two FIRs in August–October 2017 for cheating and corruption. Filed charge sheets against 191 accused, including 184 companies.<ref>{{Cite news |last=Khan |first=Aamir |date=2018-10-27 |title=Court notice to Sterling Biotech promoters in fraud case |url=https://timesofindia.indiatimes.com/india/court-notice-to-sterling-biotech-promoters-in-fraud-case/articleshow/66385750.cms |access-date=2025-12-03 |work=The Times of India |issn=0971-8257}}</ref>
* [[Enforcement Directorate]]: Launched [[Prevention of Money Laundering Act, 2002|PMLA]] probes, attaching assets worth over {{INRConvert|14500|c|year=2023}} crore by 2020, including London properties and Nigerian oil assets. Five prosecution complaints filed; four key accused declared fugitives - included the Sandesara brothers, Dipti Sandesara (Chetan's wife), and Hitesh Kumar Patel.<ref name=":0">{{Cite news |last=Pandey |first=Devesh K. |date=2020-09-28 |title=Sterling Biotech case: 4 key accused declared fugitive economic offenders |url=https://www.thehindu.com/news/national/other-states/sterling-biotech-case-4-key-accused-declared-fugitive-economic-offenders/article32716700.ece |access-date=2025-12-03 |work=The Hindu |language=en-IN |issn=0971-751X}}</ref>
* [[SEBI]]: Continued scrutiny from 2005–2007 probes into share manipulations.
* [[Serious Fraud Investigation Office]] and [[Income Tax Department]]: SFIO initiated corporate fraud probes; IT filed [[Black Money Act]] cases.<ref name="Yadav"/>
The Sandesara brothers fled to Nigeria in 2017 using Albanian passports, evading arrest.<ref>{{Cite news |last=Chauhan |first=Neeraj |date=2018-09-24 |title=Rs 5,000 cr bank fraud: Nitin Sandesara, family may have fled to Nigeria |url=https://timesofindia.indiatimes.com/india/rs-5000-cr-bank-fraud-business-family-may-have-fled-to-nigeria/articleshow/65926859.cms |access-date=2025-12-03 |work=The Times of India |issn=0971-8257}}</ref> Interpol notices were issued, and Nitin Sandesara was briefly detained in Dubai in 2018.<ref>{{Cite web |date=2018-08-16 |title=Bank fraud: Sterling Biotech owner Nitin Sandesara detained in Dubai |url=https://indianexpress.com/article/india/bank-fraud-sterling-biotech-owner-nitin-sandesara-detained-in-dubai-5308981/ |access-date=2025-12-11 |website=The Indian Express |language=en}}</ref>

In March 2021, Hitesh Patel was detained in [[Albania]].<ref>{{Cite web |last=PTI |date=2019-03-22 |title=Sterling Biotech loan fraud case: Hitesh Patel apprehended in Albania |url=https://www.thehindubusinessline.com/companies/hitesh-patel-accused-in-sterling-biotech-group-case-detained-in-albania/article26607213.ece |access-date=2025-12-11 |website=BusinessLine |language=en}}</ref>

== Settlement ==
In November 2025, a bench led by Justice J.K. Maheshwari approved a one-time settlement of ₹6,761 crore (Indian entities: ₹3,826 crore; foreign guarantors: ₹2,935 crore), of which ₹3,507.63 crore was already deposited, leaving ₹3,253.37 crore plus additional recoveries. The court mandated a final ₹5,100 crore deposit by 17 December 2025 for full quashing of CBI, ED, SFIO, IT, and FEOA cases, emphasising public money recovery but clarifying no precedent.<ref>{{Cite web |date=2025-11-25 |title=SC accepts Rs 5,100 crore settlement offer by Sterling Biotech in bank fraud case |url=https://indianexpress.com/article/legal-news/sterling-biotech-bank-fraud-case-sc-settlement-10383639/ |access-date=2025-12-03 |website=The Indian Express |language=en}}</ref> However, the ruling sparked debate, with the government reviewing implications for similar cases.<ref>{{Cite news |last=Tiwari |first=Dheeraj |last2=Sikarwar |first2=Deepshikha |date=2025-11-26 |title=Sterling Biotech case: GoI to examine impact of Supreme Court judgment |url=https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/sterling-biotech-case-goi-to-examine-impact-of-supreme-court-judgment/articleshow/125572942.cms |access-date=2025-12-03 |work=The Economic Times |issn=0013-0389}}</ref> Especially the investigation agencies expressed concerns over weakened deterrence.<ref>{{Cite web |last=Yadav |first=Krishna |date=2025-11-25 |title=Does SC order on Sterling Biotech promoters give Mallya, Nirav Modi exit routes? |url=https://www.livemint.com/companies/sterling-biotech-supreme-court-sandesara-brothers-settlement-vijay-mallya-nirav-modi-11764058121848.html |access-date=2025-12-03 |website=mint |language=en}}</ref>

On 17 December 2025, {{INRConvert|5111|c}} deposited with the Supreme Court registry as per the Supreme Court directives.<ref name=":2" />

On 13 April 2026, the Supreme Court was informed that a balance amount of {{INRConvert|0.45|c}} was deposited by demand draft to complete all remaining formalities.<ref name=":2">{{cite news |title=SC tells Sebi to respond to Sandesara plea in Sterling Biotech case |url=https://www.business-standard.com/india-news/sc-tells-sebi-to-respond-to-sandesara-plea-in-sterling-biotech-case-126032301148_1.html |publisher=Business Standard |date=23 March 2026 |access-date=21 April 2026}}</ref>

On 15 April 2026, the Supreme Court formally declared that the case had attained finality, with all dues satisfied and no substantive issues remaining pending. The total amount paid across all stages stood at approximately {{INRConvert|9800|c}}, comprising {{INRConvert|3507|c}} paid directly to the consortium of lender banks, {{INRConvert|1192|c}} realised through IBC liquidation mechanisms, and {{INRConvert|5111|c}} deposited with the Supreme Court registry. This cumulative figure represents approximately 180 percent of the original CBI FIR reference amount of {{INRConvert|5383|c}}.<ref name=":1" /><ref>{{Cite web |last=Sharma |first=Sanjay |date=2026-04-14 |title=Supreme Court closes Sandesara fraud case after Rs 9,800 crore recovery |url=https://www.indiatoday.in/india/story/supreme-court-closes-sandesara-brothers-fraud-case-rs-5000-crore-settlement-2896293-2026-04-14 |access-date=2026-04-22 |website=India Today |language=en}}</ref>

Later, the court directed that the FIR registered and all investigations by CBI, ED, attachments under PMLA, proceedings under the [[Fugitive Economic Offenders Act, 2018]], SFIO proceedings pertaining to black money, and income tax proceedings be quashed. The investigating agencies were further directed to communicate the decision regarding closure of all proceedings at all levels including at airports and to the [[Ministry of External Affairs (India)]].<ref name=":2" /><ref>{{Cite web |last= |title=Supreme Court brings Sterling Biotech case to a close after Rs 9,800 crore recovery |url=https://legal.economictimes.indiatimes.com/news/litigation/supreme-court-closes-sterling-biotech-case-with-9800-crore-recovery/130292821 |access-date=2026-04-22 |website=ETLegalWorld.com |language=en}}</ref>

As a parallel development, on 4 April 2026, a Delhi district court (Tis Hazari) passed a 47-page ex parte ad-interim injunction which restrained Google LLC, Meta Platforms, media houses and other parties from publishing or circulating content relating to the plaintiff and his family concerning the Sterling Biotech case, and directed them to de-index flagged URLs within 36 hours, finding terms such as “fugitives”, “bank fraud”, “siphoning public money”, “defrauded banks” and “money laundering” prima facie defamatory after the Supreme Court quashed all proceedings.<ref>{{Cite web |last=Bhalla |first=Vineet |date=2026-04-16 |title=Explained: Issues of press freedom, ‘right to be forgotten’ in challenge to Sandesara gag order |url=https://indianexpress.com/article/explained/explained-law/press-freedom-sandesara-gag-order-moneylife-sterling-10639686/ |access-date=2026-04-22 |website=The Indian Express |language=en}}</ref><ref>{{Cite web |last=Sharma |first=Saumya |date=2026-04-10 |title=Why Delhi court ordered removal of online media content linking Sandesaras to Sterling Biotech case |url=https://theprint.in/judiciary/why-delhi-court-ordered-removal-of-online-media-content-linking-sandesaras-to-sterling-biotech-case/2901702/ |access-date=2026-04-22 |website=ThePrint |language=en-US}}</ref><ref>{{Cite web |last=PTI |date=2026-04-09 |title=Google, Meta Urged to Remove ‘Defamatory’ Content Linking Sandesara, Family to Fraud Case |url=https://www.deccanchronicle.com/nation/google-meta-urged-to-remove-defamatory-content-linking-sandesara-family-to-fraud-case-1949475 |access-date=2026-04-22 |website=www.deccanchronicle.com |language=en}}</ref> Journalist [[Sucheta Dalal]], through her publication Moneylife, has since challenged the order as overly broad and violative of free speech; a District Judge heard the matter on 13 April 2026, issued notices to Manoj Sandesara, Google and Meta, and posted the case for next hearing on 29 April 2026.<ref>{{Cite web |title=Sucheta Dalal Moves Court Against Ban on Reporting Sterling Biotech Fraud Case |url=https://dailypioneer.com/news/sucheta-dalal-moves-delhi-court-against-ban-on-media-reports-linked-to-sandesara |access-date=2026-04-22 |website=dailypioneer.com |language=en}}</ref>

== References ==
{{reflist|2}}

== Further reading ==

* {{cite web |last1=Çela |first1=Lindita |last2=Majumdar |first2=Ushinor |date=9 June 2021 |title=Sterling Biotech's Sandesaras claim fear of religious persecution in India to evade the law |url=https://www.newslaundry.com/2021/06/09/sterling-biotechs-sandesaras-claim-fear-of-religious-persecution-in-india-to-evade-the-law |access-date=3 December 2025 |website=[[Newslaundry]] |publisher=}}
* {{Cite web |last=Tiwary |first=Deeptiman |date=2 December 2025 |title=Why ED fears the Sandesara case may open a can of worms |url=https://indianexpress.com/article/india/what-after-relief-to-sandesaras-ed-braces-for-other-defence-petitions-10396900/ |access-date=11 December 2025 |website=[[The Indian Express]]}}
* {{Cite web |date=30 June 2019 |title=Sterling Biotech scam bigger than Nirav-Choksi; Sandesaras took Rs 9,000 cr loan from Indian banks overseas: ED |url=https://www.businesstoday.in/latest/story/sandesara-brothers-availed-rs-9000-crore-loan-from-indian-banks-overseas-scam-bigger-than-pnb-fraud-ed-207442-2019-06-29 |access-date=11 December 2025 |website=Business Today}}
* {{Cite book |last=Swain |first=Smarak |url=https://www.google.co.in/books/edition/The_Great_Indian_Fraud/4tP7DwAAQBAJ?hl=en&gbpv=0 |title=The Great Indian Fraud: Serious Frauds Which Shook the Economy |date=28 December 2020 |publisher=Bloomsbury Publishing |isbn=9789389867244 |pages=324 |language=English |format=ebook}}

{{authority control}}
{{Alleged scams in India}}
{{Corporate scandals}}
{{Corruption in India}}

[[Category:Finance fraud]]
[[Category:Fraud in India]]
[[Category:Confidence tricks]]
[[Category:Corporate crime]]
[[Category:Corporate scandals]]
[[Category:Criminal investigation]]
[[Category:Financial scandals]]
[[Category:Scandals in India]]
[[Category:2010s scandals]]
[[Category:2017 scandals]]

Sterling Biotech bank loan case - Revision history

AracelyIqbal: info