FROM INDIAN FUGITIVES TO NIGERIAN POWER PLAYERS: Indian Brothers Wanted at Home Find Extravagant Haven in Nigeria.
In a momentous ceremony held in November, the Nigerian government lauded the remarkable discovery of nearly 1 billion barrels of oil in the arid northeast region, a considerable distance of about 1,000 kilometers (621 miles) from the oil-rich Niger Delta. What makes this development even more significant is the involvement of a homegrown company founded by two Indian brothers. Despite facing criminal charges and being pursued by Indian authorities for an alleged massive economic fraud, Nitin and Chetan Sandesara have successfully established the largest independent oil company in Africa’s leading crude producing nation. This accomplishment comes as international oil giants like Shell Plc and ExxonMobil Corp. scale back their operations in Nigeria, further solidifying the Sandesara brothers’ burgeoning prominence in the country’s hydrocarbons sector.During the November event, President Bola Tinubu, who was the ruling party’s presidential candidate at the time and has since been inaugurated as the newly elected president, expressed great optimism about the newfound oil reserves, stating, “This discovery will provide a multiplicity of opportunity and great prosperity for Nigeria.” However, the selection of a company owned by the Sandesara brothers’ family, who are branded as fugitives in India, to spearhead the drilling operations for this project has drawn attention to how Nigeria has become a sanctuary, shielding them from their legal troubles back home.The Indian government, led by Prime Minister Narendra Modi, has accused the Sandesara brothers of absconding after defrauding public banks of over $1.7 billion. Despite India’s request for their extradition, Nigeria has refused to comply, and BusinessDay has obtained Nigerian government documents revealing measures taken to protect the brothers from being extradited to India. The Sandesara brothers, who are Gujarati businessmen, vehemently deny the allegations of defrauding their lenders, claiming to be victims of political persecution. With their focus shifting to Lagos due to complications in India, the brothers have even applied for Nigerian citizenship, according to India’s Central Bureau of Investigation.Their Nigerian ventures have been thriving, while they continue to fight fraud charges and non-bailable warrants in India. In fact, the Sandesara businesses have become prosperous in Nigeria. Their oil and gas enterprises, operating under the slogan “Success is Natural,” have subsidiaries like Sterling Oil Exploration & Production Co. and Sterling Global Oil Resources Ltd., which currently pump approximately 50,000 barrels of crude per day in the Niger Delta through contracts with the state-owned Nigerian National Petroleum Co. Additionally, another unit is preparing to bring a third block into production this year, which will contribute to raising the total daily output to over 100,000 barrels. Apart from major international players, the Sandesara family ranks among the top exporters of oil from Nigeria, with their companies’ tax contributions accounting for 2% of the Nigerian government’s revenue in 2019. The family’s innovative approach to exporting crude, utilizing a barge-based transport system to a floating storage vessel in the Atlantic Ocean, has ensured consistent performance despite challenges faced by other producers due to pipeline theft.To further strengthen their operations, the Sandesara brothers have appointed a highly experienced former head of Nigeria’s oil regulator to oversee their energy operations and have secured significant contracts with the Nigerian government. Two years ago, Sterling Oil signed a separate agreement with the Nigerian National Petroleum Co. for the commercialization of gas within one of its oil blocks, aimed at bolstering the country’s weak power supply.While the Sandesara brothers’ businesses flourish in Nigeria, the Indian authorities continue to scrutinize their practices. Beginning in the 1980s, the brothers transformed their family’s tea-trading business into a Mumbai-based conglomerate with diverse interests spanning oil and gas, healthcare, construction, and engineering. The group even owned one of the world’s largest pharmaceutical grade gelatin manufacturers, making their conglomerate worth nearly $7 billion by the early 2010s. However, investigations conducted by India’s Central Bureau of Investigation reveal that a substantial portion of their expansion was fueled by an elaborate economic fraud scheme, leaving the group indebted to public lenders, including the State Bank of India, Bank of Baroda, and Union Bank of India, for more than 140 billion rupees ($1.71 billion). The allegations against them include the use of falsified documents to obtain bank loans and the diversion of funds abroad. The same lenders also extended credit lines to the entity that owned the Sandesaras’ Nigerian oil business.Indian state-backed lenders, including Bank of India, won two UK court judgments in 2018 and 2021, ordering Sandesara companies associated with Sterling Oil to repay nearly $60 million after defaulting on loans. India’s Enforcement Directorate, responsible for investigating money laundering and forex violations, expressed its intention in 2019 to seize the brothers’ overseas assets, including a Nigerian oil field, four drilling rigs, and a Gulfstream aircraft. In November, the group’s flagship business, Sterling Biotech Ltd., was sold to California-based alt-dairy firm Perfect Day Inc. for approximately $78 million, following approval from India’s bankruptcy court.Amid ongoing legal battles, the Sandesara brothers’ connections in Nigeria continue to grow stronger. In Indian court filings from September 2022, the brothers assert ownership of Sterling Oil, the subsidiary responsible for the majority of their crude production, proudly touting it as a “very prominent company of Nigeria.” However, an online registry for Nigerian natural resources companies lists another family member, Devak Patel, the 31-year-old son of Chetan Sandesara’s brother-in-law, as the owner. Patel has not responded to inquiries seeking clarification regarding the company’s ownership.Presently, the whereabouts of the Sandesara brothers remain uncertain. In 2020, the Indian Enforcement Directorate accused them of continually shifting their base across various countries to evade legal consequences, speculating that they may be residing in Nigeria, the UK, the US, or the UAE. There are also reports suggesting that the brothers have obtained Albanian passports. While the Sandesara brothers have neither confirmed nor denied these reports, Chetan signed an affidavit for the Indian court from Lagos in August.As the Sandesaras actively participate in the new oil development project in Nigeria’s north, a pet project of former President Muhammadu Buhari, it becomes increasingly evident that their future lies within Nigeria’s energy landscape. Sterling Oil will collaborate with the Nigerian National Petroleum Co. and another publicly owned company controlled by the 19 northern states of Nigeria to bring oil production to the northern region for the first time. Currently, the vast majority of Nigeria’s crude comes from the Niger Delta and offshore sources. In light of the declining interest in fossil fuel investments globally, as well as the logistical challenges involved in this project, the Nigerian government acknowledges the achievement of attracting over $3 billion in investment. Outgoing President Buhari remarked during the November ceremony, “It is to the credit of this administration that, at a time when there is near-zero appetite for investment in fossil fuel energy, coupled with the location challenges, we are able to attract investment of over $3 billion to this project.”President Tinubu, Buhari’s successor, has set ambitious goals to increase Nigeria’s daily oil output by over 60% to 2.6 million barrels by 2027, with a further increase to 4 million barrels by 2030. However, achieving these targets may prove challenging, as international oil giants such as Shell and Exxon are divesting from onshore and shallow water assets in the country. To realize these aspirations, the incoming government will likely rely on independent producers like Seplat Energy Plc and Sterling Oil.During last year’s ceremony, Mohit Barot, Chief Operating Officer of Sterling Oil, assured President Buhari that the company had secured the necessary funding to drill wells and construct a complex for fuel, fertilizer, and electricity production. Barot expressed his commitment to delivering on their promises, stating, “We assure you, Mr. President, that we will deliver on our commitments and your expectations… Today is just the start of our long journey together.”