Believe it or not, the Sandesara Group is set to get a port project worth Rs 1,500 crore from none other than the Gujarat state government.

The State government has put this information out on its website, as well as in a presentation on Vibrant Gujarat 2019 that was showcased to the press in September earlier this year. In case you’re wondering who that is, the Sandesara group is under the scanner of Enforcement Directorate (ED) and the CBI for a Rs 5,000 crore bank fraud and for financing CBI Special Director Rakesh Asthana’s daughter’s marriage.

It is not yet known whether this is an oversight or if the state government made this decision despite the knowledge that the ED has initiated a process to declare the Sandesaras as economic offenders. In fact, the  Gujarat-based pharmaceutical company Sterling Biotech Ltd (SBL) Group, which is owned by the Sandesara Group, has been facing a multi-agency investigation since 2011 when the IT department raided the firm’s offices and properties and “indicted several taxmen of taking bribes to allegedly overlook incriminating proof.”

The CBI filed has filed two first information reports (FIR) in the matter, one in August 2018, and the other on October 25, 2018.

According to slide number 16 of a Vibrant Gujarat 2019 presentation shown to the press in September 2018, a proposal has been made to carry out “41 MMTPA ports by Sandesara Group (Solid Cargo, Liquid Cargo and Container)”. 

Slide number 16 from Vibrant Gujarat 2019 presentation 

This detail has been corroborated by information on the Gujarat Petroleum, Chemical and Petrochemical Investment Region (PCPIR) website, which clearly states a proposal of “40 MMTPA ports by Sandesara Group (Solid Cargo, Liquid Cargo and Container Port) with an investment of ₹1,500 crore”.

                                                                Screenshot from the PCPIR website

The Gujarat government has to be aware that the Enforcement Directorate (ED) has filed a prosecution complaint in the Special PMLA court in New Delhi in October this year with respect to the ₹5,000 crore bank fraud case committed by Gujarat-based pharmaceutical company Sterling Biotech Ltd (SBL) Group—which is owned by the Sandesara group of companies. According to Mumbai Mirror, the ED had stated “that the Sandesaras hatched a criminal conspiracy to cheat banks by manipulating figures in balance sheets and induced banks to sanction higher loans. After obtaining these loans, the promoters diverted, layered and laundered these loans to non-mandated purposes through a web of shell companies for their personal purposes.”

It’s not just the ED that is chasing the Sandesara brothers; the ₹5,000 crore default case is also being probed by the Central Bureau of Investigation (CBI). The Sandesara Group has been tainted by the central investigating agency as recently as October 25, 2018, when investigations into its special director Rakesh Asthana’s daughter’s lavish 2016 wedding in Vadodara revealed a connection between Asthana and Chetan Sandesara. The probe, headed by additional director AK Sharma, led to the agency questioning close to a dozen people and they received replies from at least four hotels about the expenses made and the facilities that were provided. The hotels and venues included the Laxmi Vilas Palace, Hotel Express Towers, Suncity Club and Resort and Surya Palace Hotel. According to an article in India Today, the CBI had recovered documents during its investigations which allegedly revealed that the sangeet ceremony took place at a farmhouse owned by Chetan Sandesara.

It is important to note that even though the investigations had revealed a connection between Asthana and Chetan Sandesara, at the time of the wedding back in November 2016, Sandesara was not facing any probe by the agency.

More importantly, the current whereabouts of the Sandesara brothers are unknown to both the CBI as well as the ED. So how do officials in the Gujarat government propose to hand over the project to the group? Who will execute the project? In September earlier this year, the CBI had approached Nigeria seeking information on Chetan Sandesara’s brother Nitin Sandesara. This was just a day after reports had emerged citing that Nitin Sandesara—one of the key accused in the ₹5,000 crore bank loan fraud case—had fled from the UAE. PTI reported that the CBI had, at the time, asked Nigeria’s Interpol wing to confirm if the absconding businessman had moved into the country.

The total amount of loan fraud as of October 23, 2018, is estimated to be ₹8,100 crore. Of this amount, the banks have declared that ₹3,675 crore of it is in domestic loans and the remaining ₹4,425 crore is in foreign loans. Banks further reported that the total outstanding amount with reference to SBL Group is ₹13,754 crore.

Rakesh Asthana’s name was drawn into this bank fraud case ever since a diary with the initials “RA” was seized during a raid at the Sandesara premises by the IT department in 2011. However, Asthana has not been named by either the ED or the CBI in their respective FIRs filed in this case, according to reports. On August 24, Asthana wrote to the cabinet secretary that the initials “RA” mentioned in the diary stood for “running account” and not his name.

Given the connections that are slowly being revealed by the ED and the CBI, has the Gujarat government made a sincere mistake in proposing that the port project be given to the Sandesara Group? Or do they know something that the rest of us—including the ED and CBI—don’t?