The Enforcement Directorate (ED) has sought permission from the dedicated bankruptcy court to intervene in the insolvency resolution pleas against Sterling group companies Sterling International Enterprises and Sterling SEZ & Infrastructure.
ED on Wednesday sought more time from the Mumbai bench of the National Company Law Tribunal (NCLT) to file its response challenging the Sterling promoters’ move to pay the lenders to the two group companies to withdraw the insolvency resolution plea and take back control of the firms.
A division bench of tribunal, presided over by judicial member Bhaskara Pantula Moha and technical member Shyam Babu Gautam, allowed ED two weeks’ time to file its response in the matter, and adjourned the matter to March 23.
Sterling group is accused of defaulting on and diverting loans of about Rs 15,000 crore, and central agencies ED, Central Bureau of Investigation (CBI) and the income-tax department are looking into the dealings of its promoters Chetan and Nitin Sandesara.
The Sandesaras are currently absconding and are believed to be in Africa.
“Our primary contention is that as per the National Company Law Appellate Tribunal (NCLAT) order in the Sterling Biotech (case), which had clarified that the promoters of the company can’t pay from the proceed of crime and the proceedings against the promoters will continue under the Prevention of Money Laundering Act (PMLA),” Nitesh Rana, an advocate representing ED, told NCLT on Wednesday.
The appellate tribunal had in August last year allowed the promoters to take control of Sterling Biotech after making full payment to the lenders, setting aside an NCLT order to liquidate the company.
The Sandesaras are now looking to do the same with Sterling International and Sterling SEZ.
More than 90% of lenders to the biotech firm had approved the settlement offer of around ?3,945 crore against total dues of over ?8,100 crore and withdrawal of the insolvency case under Section 12 (A) of the Insolvency and Bankruptcy Code (IBC).
However, in its order, the appellate tribunal observed, “In so far asset of the corporate debtor (Sterling Biotech) is concerned, if it (the resolution offer) is based on the proceeds of the crime, it is always open to the Enforcement Directorate to seize the assets of the corporate debtor and act in accordance with the Prevention of Money Laundering Act, 2002 (PMLA).”
In June last year, ED had attached properties of over Rs 9,700 crore owned by the Sandesaras.
Source: The Economic Times, February 27, 2020