"Interested In Money Coming Back To India": Top Court To SEBI In Sandesara Case

The Supreme Court has asked the Securities and Exchange Board of India to respond to a plea filed by billionaire brothers Nitin Sandesara and Chetan Sandesara, who have challenged the regulator's refusal to close its investigation against them. A bench said its primary concern was ensuring recovery of funds -- "interested in money coming back to India" -- as it would benefit banks. The court granted SEBI time till April 2 to file its reply.

Appearing for the Centre and SEBI, Solicitor General Tushar Mehta assured the court that the money may be released to banks in this financial year. This he said in a related plea by banks seeking disbursal of the amount in the respective accounts of the Secured Lender Banks as per details furnished.

The SEBI said it has already written to Registrar (Judicial-Administration) of the top court regarding disbursement and the needful will be done.

The court also clarified that the Rs 5,100 crore deposited by the Sandesara brothers as part of a settlement must be distributed among secured lenders on a proportionate basis.

Court Had Questioned SEBI 

Earlier this month, the Supreme Court had flagged concern over SEBI continuing its probe despite a settlement reached by the brothers.

On March 16, the bench questioned the regulator, asking why it was "coming in the way" even after the court had, in November, quashed criminal proceedings against the brothers following a one-time settlement payment of Rs 5,100 crore.

The bench, comprising Justices JK Maheshwari and Atul S Chandurkar, had observed that once the court had ordered closure of cases and payments were made, all proceedings were expected to conclude.

Today Mehta said they are trying to solve the issue with SEBI and it was not adversarial.

The Case

The case relates to alleged financial irregularities involving Sterling Biotech and its promoters. Investigators have claimed that loans taken from foreign banks were routed back into the company as investments, potentially misleading investors.

Counsel for the Sandesara brothers told the court that the SEBI had refused to shut its probe despite full compliance with the top court's settlement order.

On November 19, the Supreme Court had agreed to quash criminal proceedings against the brothers, subject to their depositing Rs 5,100 crore which is roughly one-third of the dues in a bank fraud case.