New Delhi: Fugitive businessman Hitesh Narendrabhai Patel, wanted in the Rs 8,100 crore bank fraud involving Sterling Biotech and Sandesara Group, was running benami entities to siphon off loans obtained from financial institutions. The documents reviewed by Firstpost reveal Hitesh Patel, his wife Mayuri and his parents Narendra Patel and Jayashree were made directors and shareholders of several such firms by Sandesara group promoters, Nitin and Chetan Sandesara. Hitesh is brother of Dipti Sandesara, wife of Chetan Sandesara, who is also on the most wanted list of Enforcement Directorate (ED).
Hitesh was detained in Tirana, capital of Albania last week on the basis of Interpol's Red notice. Agate Chemicals Limited, controlled by Hitesh and his wife Mayuri Patel, was used to launder bank loan amount through manipulative trading with promoter companies. Hitesh’s mother Jayashree also owns 28.49 percent share-holding in Agate Chemicals. Hitesh, his mother and wife are also shareholders in another benami company, American Biotech Limited. Mayuri has 20 percent holding in Eminence Trading Private Limited and Jash Distributors Private Limited.
Hitesh Patel, his parents and wife also controlled MAA Infrastructure Company Limited. Interestingly, an office assistant Shivshankar is the director of the company.
Mayuri is also listed as a shareholder in Panoramic Investment Private Limited though a majority of holding is vested with fugitives Nitin, Chetan and Dipti Sandesara.
Hitesh, along with his wife and father controls 12 percent holding in PMT Engineering Limited, whereas Nitin and Chetan Sandesara are listed as directors. The family also owns majority shares in Traub Automatic Private Limited and Vyom Enterprise Limited. Hitesh is also director of Avon Properties Private Limited and Shyamal Holding and Trading Limited. According to the documents, a total of 13 addresses in Mumbai, mostly residence of employees, were used as office address for all the benami companies.
“The benami companies are divided into trading and engineering firms on the basis of whether they are used for bogus purchase or for showing addition to fixed assets. A substantial amount of money was transferred from one company to the other by way of cheques. A probe reveals that cheques were also obtained against cash payments, which indicates accommodation entries regularly passed through these benami companies,” documents claimed, said an Enforcement official.
A senior official said money obtained through bank loans, invariably came back to the promoters group after traveling through benami entities, which has been described as circuitous transactions. Investigation reveals that bogus business transactions was used to show the spectacular growth of 10-fold increase in turnover and profits of the company to inflate its turnover.
The official said within a short period of 10 years from 2001 to 2010 the flagship company reported a turnover increase from Rs 160 crore to Rs 1,600 crore, reserves from Rs 178 crore in 2001 to Rs 2,444 crore by 2010 and loan funds also increased simultaneously.
The official providing a peek into the complex web of transactions said co-mingling of funds was meant to manipulate the books and launder the money. For example, he said, a group company Jang Priya Investment Private Limited made the first level of fund transfer to Sterling Biotech Limited. Then, from Sterling Biotech Limited, the funds are routed through benami entities, namely Turin Trading Private Limited, Shreeji Drug Pharma Private Limited and Lotus Glycol Limited. Subsequently, money was routed through four channels—first transaction is routed through Pearl Infrastructure Limited and reaches back to Jang Priya Investment Private Limited.
“The second lot is routed through Flair Engineering Private Limited—another benami entity to the group company, Sterling SEZ Private Limited and then reaches back to Jang Priya Investment. The third lot is routed to the benami company Sulabhya Engineering Private Limited and then to Sealord Dwellers Private Limited which finally reaches back to Jang Priya Investment. The fourth lot is routed through Flair Engineering to Natasha Investment Private Limited before finally reaching back to Jang Priya Investment Limited. This clearly indicate that these transactions camouflaged as trade were part of a larger scheme to launder money,” the official further added.
Other relatives, Rajnikant Sandesara and Trupti Patel, were also made shareholders of several benami companies to launder public money obtained as bank loan. Trupti Patel has share-holding in Bally Trading Private Limited, Britney Trading Private Limited, Embio Trading Private Limited, Fame Engineering Private Limited, Gatsby Trading Private Limited, Jitlal Financial Services Private Limited, Likhit Finance Private Limited, Marut Apparels Private Limited, Nikhila Infrastructure Private Limited, Sealord Colonizers Private Limited, Sealord Dwellers Private Limited, Turin Trading Private Limited and Viel Insurance Services Private Limited.
The Enforcement Directorate (ED) documents said through these bogus companies, purchase and sale of trading goods and capital assets have been shown with the sole purpose of inflating turnover and to claim depreciation. “Substantial sums are found circulating within the Sandesara group by way of loans and advance from these benami entities,” ED said.
Sources privy to the probe into layered transactions executed by Patel and Sandesara brothers said benami entities booked expenses in their own case and bearer cheques were issued in favour of third parties including employees and fictitious persons and all the benami entities banking transactions were handled in a centralised manner.
“The accounting and audit of benami companies were carried out at Chawda Commercial Centre, Malad and Suvidhi Apartment, Goregaon (West) in a centralised manner by pooling in the funds and diverting it as per requirement. These benami entities were also used for internal cash generation through booking of bogus expenses and then issuance of third party bearer cheques to launder the money,” sources said.
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Updated Date: Mar 25, 2019 09:39:44 IST