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 zones 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 ₹8,100 crore (equivalent to ₹230 billionorUS$2.7 billion in 2023) 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 ₹4,500 crore (equivalent to ₹63 billionorUS$750 million in 2023), and laundered proceeds via benami transactions. [2]
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. [3] By 2017, the loans turned non-performing assets, prompting complaints from banks. [4]
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. [5]
- Enforcement Directorate: Launched PMLA probes, attaching assets worth over ₹14,500 crore (US$1.7 billion) 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. [2]
- 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. [3]
The Sandesara borthers fled to Nigeria in 2017 using Albanian passports, evading arrest. [6] Interpol notices were issued, and Nitin Sandesara was briefly detained in Dubai in 2018. [7]
In March 2021, Hitesh Patel was detained in Albania. [8]
Aftermath
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. [9] However, the ruling sparked debate, with the government reviewing implications for similar cases. [10] Especially the investigation agencies expressed concerns over weakened deterrence. [11]
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