SBI Caps might face CBI inquiry for its role in Sandesara Group loans: Report

SBI Caps could be called for an inquiry by the Central Bureau of Investigation’s Banking and Securities Fraud Cell in connection with its role in arranging loans for the Sandesara Group’s oil businesses, reports DNA.

One of the country’s top investment banks, SBI Caps was a debt syndication agency for the group’s subsidiary, Sterling Oil Resources. It prepared the information memorandum for the loan arrangement, sharing a plan with banks on the manner of loan repayment from the oil business’ revenues.

However, two aspects of the deal have come under the scanner. One is the basis on which SBI Caps made the offer to the banks involved and the other is the due diligence undertaken prior to the report being drawn up. The paper reports that the oil well on which the loan was sanctioned by the banks was already mortgaged to the Zenith International Bank of Nigeria.

Moneycontrol could not independently verify the report.

"It seems the loan was taken from domestic banks to repay the loan of Zenith International Bank," a source told DNA. An October 2017 FIR filed by the CBI states that a consortium of banks, led by Andhra Bank, had sanctioned a loan of Rs 1,375 crore to Sterling Oil Resources.

Another source told the paper, "Bank staff in their statement to CBI blamed SBI Caps report for portraying a rosy cash flow picture from the Nigerian oil business of the Sandesara Group."

Last month, the Enforcement Directorate attached over Rs 9,700 crore worth assets in Nigeria, including four oil rigs, an oil field, ships and an aircraft. Prior to this, assets of the Sandesara Group worth Rs 4,700 crore had been attached by the ED in 2018. The total value of attached assets of the group is now around Rs 14,500, surpassing PNB scam accused diamantaire Nirav Modi’s fraud.

Sandesara Group promoters are also being investigated by the ED for allegedly siphoning off funds borrowed from domestic banks. An investigation revealed that Sterling Biotech (Sandesara Group) and its main promoters, namely Nitin Sandesara, Chetan Sandesara and Deepti Sandesara defrauded Indian banks to the tune of over Rs 14,500 crore, news agency ANI reported.