The Enforcement Directorate, which fights financial crime, said on Friday it filed additional charges against Anup Garg, a former director of state-run Andhra Bank, in connection with a more than 50 billion rupee ($769.3 million) fraud case involving Sterling Biotech that was filed last year.
Authorities have accused senior executives of Sterling and Garg of "criminal conspiracy" and falsifying accounts to allow Sterling to raise much larger loans from Andhra Bank and other lenders than it would have been able to otherwise.
The Central Bureau of Investigation (CBI) had filed a complaint in the case last year in October.
Agencies have accused Garg, a chartered accountant who was on the bank's board for three years until October 2009, of receiving bribes from the Sterling executives between 2008 and 2009.
Sterling group companies owed a total 53.83 billion rupees to banks as of end-2016, according to the CBI. All the loans have turned non-performing, the agency said.
In a stock exchange filing after close of trading on Monday, Andhra Bank, headquartered in Hyderabad, said it was the lead bank for two Sterling group companies to which its total exposure is about 11.5 billion rupees as on date.
The bank's exposure to the Sterling group companies have been classified as non-performing since March 2015, Andhra Bank said, adding it reported last December the accounts as fraud to the Reserve Bank of India and has also filed a police complaint.
Sterling Biotech executives were not reachable for comment when contacted on the board line of the company's Mumbai office. Garg was also not reachable for a comment.
A $2 billion fraud disclosed last month in second-biggest state-run lender Punjab National Bank has shaken the country's financial sector at a time when Indian banks are battling near-record $146 billion of soured assets.
After the PNB fraud case, the government has ordered banks to probe all non-performing loans of more than 500 million rupees to see if there was any sign of any fraud.
Andhra Bank shares closed 6.7 percent lower at 35.95 rupees, their lowest level since August 2003. The stock fell as much as 17.1 percent during trade.
Sterling Biotech fell 3.5 percent, its maximum daily limit, to 2.75 rupees ($0.0423).
($1 = 64.9950 Indian rupees)
(Reporting by Devidutta Tripathy and Arnab Paul; Editing by Euan Rocha and Muralikumar Anantharaman)
Gupta firms lose bid to have Bank of Baroda remain in South Africa: Eyewitness News
JOHANNESBURG (Reuters) - Almost 20 South African companies linked to the Gupta family have lost a court bid to have Bank of Baroda, the last lender doing business with the firms, maintain its operations in the country, local news service Eyewitness News said.
The Bank of Baroda's South African division was thrust into the spotlight two years ago when it agreed to take on the Guptas after South Africa's major banks turned their back on the family's businesses due to reputational risks.
The Bank of Baroda said a month ago that it had pulled the plug on its South African business, citing a strategic shake-up to slim down in international markets.
The Guptas, a trio of Indian-born brothers, have been accused by the South African public anti-graft watchdog of using their friendship with former president Jacob Zuma to influence policy decisions. Zuma and the Guptas deny any wrongdoing.
The local Eyewitness News (EWN) service said that the High Court in Pretoria had dismissed the Gupta companies' application to prevent the Indian bank from closing its South African operations.
In his ruling, Judge Ntendeya Mavundla said the bank's right to trade or not to trade supersedes whatever right, if any, the applicants might have, EWN reported.
This will make it all but impossible for the companies to operate in South Africa. Some of their assets such as the Optimum coal mine are currently in business rescue proceedings.
Official documents showed last month that at least eight companies owned by the wealthy Gupta family had filed for protection from creditors.
Reuters could not immediately get a copy of the ruling or reach officials from Gupta companies and Bank of Baroda, which is no longer operating in South Africa.
The country's chief prosecutor last month declared Ajay Gupta a "fugitive from justice" after he failed to hand himself in to police, who are conducting an investigation on the family.
Pressure has been mounting on the Guptas since Zuma was forced from office last month by the ruling African National Congress party. His resignation came just hours after police raided the luxury home of the Gupta family.
Indian tax inspectors last Tuesday raided premises of the Gupta family. Amrendra Kumar, a senior income tax official in Uttar Pradesh, told Reuters that the Gupta brothers were suspected of finding ways to bring "illicit money" they had earned abroad into India.
(Reporting by Ed Stoddard; Editing by James Macharia and Louiser Heavens)
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)