Supreme Court Allows Billionaire Brothers to Settle $1.6 Billion Fraud Case with Partial Payment

India's Supreme Court has agreed to drop criminal proceedings against billionaire brothers Nitin and Chetan Sandesara if they pay approximately $570 million—just one-third of the total dues—in a landmark $1.6 billion bank fraud case. The order, made public on Friday, establishes a December 17 deadline for payment and could set a significant precedent for how large-scale financial crimes are resolved in India.

Background and Context

The Sandesara brothers, whose business empire spans pharmaceuticals and energy, were accused of defaulting on loans from multiple Indian banks before fleeing the country in 2017. According to court documents accessed by Reuters, the brothers obtained Albanian passports and have consistently denied any wrongdoing. Indian authorities designated them among 14 "fugitive economic offenders" under a 2018 law designed to seize assets from those accused of major financial crimes.

This legislation has also been applied to high-profile cases involving Kingfisher Airlines founder Vijay Mallya and diamond trader Nirav Modi, both of whom similarly deny allegations of bank fraud and remain outside India.

Key Figures and Entities

The Sandesara brothers control Sterling Oil Exploration and Energy Production Company in Nigeria, which according to its website contributes approximately 2.5% of the country's federal revenue. India's federal crime agency has accused the brothers of orchestrating the $1.6 billion fraud scheme, though they have maintained their innocence throughout the proceedings.

According to the Supreme Court order, the brothers' counsel, Mukul Rohatgi, informed the bench that his clients were prepared to pay the settlement amount "to get rid of all proceedings." Once the payment is completed, the court may quash the criminal charges against them.

Legal and Financial Mechanisms

The settlement arrangement represents a significant departure from traditional criminal prosecution in India's financial crime cases. The Supreme Court's conditional order creates a pathway for accused individuals to avoid trial through partial financial restitution. This approach mirrors practices in some foreign jurisdictions where fines serve as alternatives to criminal proceedings.

However, legal analysts note that such settlements may leave Indian lenders unable to recover the full amounts owed. The brothers would pay approximately one-third of the total $1.6 billion in alleged fraudulent loans, potentially creating a substantial shortfall for the banking institutions involved.

International Implications and Policy Response

The ruling could establish a precedent for other economic offenders seeking to resolve criminal charges through partial payments. Supreme Court lawyer Debopriyo Moulik told Reuters that "this is very similar to the approach adopted in foreign countries where fines are an alternative to facing trial."

The case highlights ongoing challenges in India's efforts to hold financial criminals accountable, particularly when suspects flee abroad. The 2018 fugitive economic offenders law was designed to address these challenges, but the Sandesara settlement suggests that authorities may be willing to compromise on full restitution to secure some recovery.

Sources

This report draws on Supreme Court order documents accessed by Reuters, public statements from legal representatives, and reporting on India's fugitive economic offenders legislation published between 2018 and 2024.