New Delhi

The Supreme Court of India on Thursday 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 pass a detailed order if the directive is not followed.

A bench comprising Justices J K Maheshwari and A S Chandurkar said its earlier order was clear that all proceedings, including those by SEBI, were to be quashed once the promoters deposited Rs 5,100 crore with the court registry.

The court emphasised that if the regulator complies, the matter would be settled, but failure to do so could prompt stricter judicial action. SEBI’s counsel informed the bench that discussions are ongoing with Solicitor General Tushar Mehta and sought additional time to update the court.

Representing the Sandesara brothers, senior advocate Mukul Rohatgi argued that despite the deposit being made, SEBI has not yet formally closed its proceedings and must act in line with the court’s earlier ruling.

The matter has now been listed for further hearing on April 10, when the court expects clarity on the regulator’s position.

SEBI has been investigating allegations that the promoters of Sterling Biotech secured loans from overseas banks and routed funds back into the company in a manner that could misrepresent its financial health and mislead investors.

In November last year, the Supreme Court accepted a settlement proposal under which the Sandesara brothers agreed to deposit Rs 5,100 crore as a full and final resolution of claims linked to the case. The amount was deposited in December 2025, following which the court ordered the quashing of proceedings.

Separately, a group of lenders has approached the court seeking distribution of the deposited amount. The consortium, comprising 20 out of 26 secured creditors, has calculated total outstanding dues of over Rs 19,000 crore and proposed proportional allocation of the funds.

The court had earlier directed that payments be released to banks that have completed formalities, while shares of the remaining lenders be kept in fixed deposits until their claims are verified.

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The dispute stems from multiple legal proceedings initiated against the Sandesara brothers, including cases filed by central agencies and under various financial laws.