Brothers Sandesara: Fugitives from Indian law, oil kings in Nigeria

By William Clowes

At a ceremony in November, the Nigerian government celebrated the discovery of as many as 1 billion barrels of oil in the country’s arid northeast, almost 1,000 km away from the crude-rich Niger Delta.

The state’s partners in the multi-billion dollar project in the impoverished, landlocked corner of the country is a company founded by two brothers from India. The siblings have built the largest independent oil company in Africa’s biggest crude producing nation even as India pursues them as criminals — accusing them of perpetrating “one of the largest economic scams in the country.”

Now, as newly elected President Bola Tinubu sets ambitious targets for Nigeria’s hydrocarbons sector, companies created by the brothers, Nitin and Chetan Sandesara, seem poised for an increasingly prominent role — especially as international oil giants such Shell Plc and ExxonMobil Corp retreat from the West African country.

“This discovery will provide a multiplicity of opportunity and great prosperity for Nigeria,” Tinubu said at the November event. Sworn in on May 29, he was the ruling party’s presidential candidate at the time.

The selection of a firm owned by the family of the duo branded as fugitives by India to drill wells for the project is just the latest sign of how Nigeria has provided the brothers a haven, effectively insulating them from troubles back home. Indian Prime Minister Narendra Modi’s government has accused the tycoons of absconding after defrauding public banks of more than $1.7 billion. Nigeria has refused India’s request to extradite them.

The Sandesara brothers, Gujarati businessmen who left India in 2017, deny cheating their lenders and say they are victims of political persecution. While the brothers fight fraud charges and non-bailable warrants from India, the Sandesara businesses are flourishing in Nigeria. The African nation refused to arrest them four years ago saying the Indian allegations “appeared to be political in nature,” according to a letter published by the Organised Crime and Corruption Reporting Project.

In India, the brothers’ private jet, swanky cars and star-studded parties at a 60,000-square-foot farmhouse in Ampad village in Gujarat routinely provided fodder for tabloids and social media sites, according to news outlet The Print. From a sanctuary on Lagos’ upscale Victoria Island, one of their Nigerian companies has continued that glitzy tradition, sponsoring annual Diwali celebrations that are the talk of the city’s small Indian community, even flying in Bollywood singers like Shreya Ghoshal to perform.

The family’s Nigerian oil and gas business—with the slogan “Success is Natural” —is thriving. The group’s subsidiaries—Sterling Oil Exploration & Production Co and Sterling Global Oil Resources Ltd—pump about 50,000 barrels of crude a day in the delta via contracts with the state-owned Nigerian National Petroleum Co. Other than the international majors such as Shell and Chevron, the Sandesara family is the top exporter of oil from Nigeria.

The brothers have hired the former head of the Nigerian government’s oil regulator to head their energy operations, and concluded major contracts with the state.

Beginning in the 1980s, the brothers transformed a family tea-trading business into a Mumbai-headquartered conglomerate spanning oil and gas, healthcare, construction and engineering and owning one of the world’s largest manufacturers of pharmaceutical grade gelatine. By the early 2010s, the group said it was valued at almost $7 billion. Some of that expansion was bankrolled by a “well calculated economic fraud” that left the group owing more than Rs 140 billion to public lenders including SBI, Bank of Baroda and Union Bank of India, the CBI told the country’s Supreme Court a year ago.

Among accusations levelled against them include the use of “false and fabricated documents” to secure bank loans and the diversion of funds overseas. The same lenders also provided credit lines to the entity that owned the Nigerian oil business, the CBI said in a December 2019 charge sheet.

State-backed lenders, including Bank of India, won two judgments from UK courts — in 2018 and 2021 — ordering Sandesara companies providing services to Sterling Oil to pay almost $60 million after they defaulted on loans.

The Enforcement Directorate (ED), which investigates money laundering and forex violation cases, said in 2019 that it wanted to seize the brothers’ overseas assets, including a Nigerian oil field, four drilling rigs and a Gulfstream aircraft. The group’s flagship business Sterling Biotech Ltd was sold to California-based alt-dairy firm Perfect Day Inc in November for about $78 million in a transaction approved by India’s bankruptcy court.

Following a petition by the Sandesaras to quash the CBI and ED cases against them, the Supreme Court of India paused proceedings last year.

The brothers said they wanted to reach a financial resolution with creditors. But the investigating agencies have said any settlement “cannot absolve the criminal liability of the accused.”

The brothers, who told the court their Indian companies have repaid more than was disbursed to them in loans, say the agencies’ “sole aim is to browbeat, harass, harangue and humiliate” them, and claimed they were declared fugitives in “a grossly illegal manner.” They say the Modi government has a vendetta against the Sandesaras because of their ties to opposition and Muslim politicians, according to media reports that cite their filings in other court cases.

An Indian lawyer for the Sandesaras didn’t respond to multiple emails requesting comment. The group chairman and two directors of the Nigerian oil companies didn’t reply to questions sent by Bloomberg. The CBI, ED and the Sandesaras’ main creditors also didn’t address queries on the status of the proceedings against the brothers.

Ironically, even as the Indian government was building its case against the pair, their Nigerian companies supplied cargoes of crude worth almost $1.5 billion to India’s state-owned refineries in the seven years to January 2020, the brothers said in court filings.

With their troubles in India showing no signs of abating, the brothers’ ties in Nigeria are deepening.

Where the brothers currently spend their time is unclear. The ED accused them in 2020 of “shifting their base from one country to another to escape the clutches of law” and said they were presumed to be in Nigeria, the UK, the US or the UAE. They have also obtained Albanian passports, according to The Wire and other Indian media outlets. The brothers have neither confirmed nor denied the reports. Chetan signed an affidavit for the Indian court from Lagos in August.

Meanwhile, the Sandesaras’ participation in the new development in Nigeria’s north — a pet project of former President Muhammadu Buhari, who stepped down this month — may be yet another sign that their future lies in the West African country.

Sterling Oil will carry out the venture with the NNPC and another public company controlled by Nigeria’s 19 northern states to bring oil production to the upper part of the country for the first time. Almost all of Nigeria’s crude currently comes from the Niger Delta and off its shores.