MCA objects to Sterling Biotech being removed from bankruptcy code

The Ministry of Corporate Affairs (MCA) on April 13 has objected to the decision for Sterling Biotech to come out from the insolvency bankruptcy code (IBC).

The Western Regional Director of the MCA, Manmohan Juneja, moved an application in the National Company Law Tribunal (NCLT) to stop this application as its promoters are absconding.

Juneja filed a detailed affidavit where he mentioned the wrong doings of Sterling Biotech. The MCA's argument in court, as stated by its legal director  Sanjay Shourie, is that the company's promoters are facing a probe from multiple agencies and that its promoters are out of the net of investigation agencies.

Sterling Biotech took loans of over Rs 5,000 crore from a consortium led by Andhra Bank which had turned into non-performing assets.

The company's absconding promoters, Nitin Sandesara and Chetankumar Sandesara, are offering to return all the money to the banks.

As per the FIR, the total pending dues of the group of companies were Rs 5,383 crore as on December 31, 2016. The Enforcement Directorate (ED) has taken the FIR into cognisance.

The ED has arrested few people in this case including Delhi-based businessman Gagan Dhawan, former Andhra Bank director Anup Garg and Sterling Biotech Ltd director Rajbhhushan Dixit. It had also attached assets worth over Rs 4,700 crore of the pharmaceutical firm in June this year.

Multiple prosecution complaints or chargesheets have also been filed by it before a special court here.