The Supreme Court of India directed SEBI to close proceedings against Sterling Biotech and promoters Chetan and Nitin Sandesara after Rs 5,100 crore deposit. The Court warned of a detailed order if its clear earlier directions are not complied with.
NEW DELHI: The Supreme Court of India directed the Securities and Exchange Board of India to close its proceedings against Sterling Biotech Limited and its promoters, Chetan Sandesara and Nitin Sandesara, warning that it may issue a more detailed order if this instruction is not followed.
A bench of Justices J K Maheshwari and A S Chandurkar noted that its earlier order was explicit: all proceedings, including those by SEBI, were to be quashed once the promoters deposited Rs 5,100 crore with the court registry.
The court stressed that compliance by the regulator would settle the matter, while non-compliance could invite stricter judicial measures. SEBI’s counsel told the bench that consultations with Solicitor General Tushar Mehta are underway and sought more time to update the court.
Senior advocate Mukul Rohatgi, representing the Sandesara brothers, argued that despite the deposit having been made, SEBI has not formally closed its proceedings and must follow the court’s prior directive.
The case is listed for further hearing on April 10, when the court expects to hear SEBI’s position. SEBI has been probing allegations that the promoters obtained loans from overseas banks and routed funds back into the company in ways that could misrepresent its financial condition and mislead investors.
In November last year, the Supreme Court accepted a settlement under which the Sandesara brothers agreed to deposit Rs 5,100 crore as full and final settlement of claims related to the case. The sum was deposited in December 2025, after which the court ordered the quashing of proceedings.
Separately, a group of lenders has petitioned the court for distribution of the deposited funds. The consortium 20 of the 26 secured creditors has calculated outstanding dues of over Rs 19,000 crore and proposed a proportional allocation of the amount.
The court had earlier directed that payments be released to banks that completed required formalities, while amounts for the remaining lenders be held in fixed deposits until their claims are verified. The controversy arises from multiple legal actions against the Sandesara brothers, including cases initiated by central agencies and under various financial statutes.