ED registers case against Sharad Pawar, Ajit Pawar in Rs 25,000 crores MSCB scam case

Mumbai, September 24, 2019 : The Enforcement Directorate (ED) has registered money laundering case in Maharashtra State Cooperative Bank scam against NCP chief Sharad Pawar, his nephew and former deputy chief minister Ajit Pawar and others.

A criminal PIL was filed on 28.01.2019 before Bombay High Court in case of Maharashtra state cooperative bank scam. The High Court after detailed hearing and going through the complaint, on 22.08.2019 directed the EOW, Mumbai Police to register an FIR .

The FIR was thereafter filed and consequently an ECIR was recorded on 23/09/2019 against the then Chairman, MDs, Directors of Maharashtra State Cooperative bank (MSC), along with Mr. Sharad Pawar, Mr. Ajit Pawar, Mr. Diliprao Deshmukh, Mr. Isharlal Jain, Mr. Jayant Patil, Mr. Shivaji Rao Nalvade, Mr. Anand Rao Adsul, Mr. Rajendra Shingane, Mr. Madan Patil and others.

It is alleged that the then top executives i.e. Chairman, MDs, Directors, CEOs, managerial staff of Maharashtra state cooperative bank (MSC) and office bearers and directors of Sakhar Karkhanas (cooperative sugar factories “CSF”), Soot Girnis and other processing units were given loans in a fraudulent manner by MSC Bank and in process several illegalities were committed. The scam is pegged at Rs 25,000 crore.

The loans provided to Cooperative Sugar Factories (CSFs) by the officials of the MSC bank, who were connected with the owners of CSFs.

There were several irregularities in the sanctioning of the loans committed, only with the purpose of extending benefits to the Directors of the lending bank, for personal gains thereby defrauding and cheating the bank and its shareholders. Loans were sanctioned to CSFs, despite having weak financials and negative net worth. No collateral was taken in many cases and loans were extended on basis of fraudulent and dishonest representation to the bank. Additional working facilities were also extended to a certain few CSFs without having any prudent reasons.

Thereafter, due to the alleged mismanagement and underutilization of capacity and increasing overhead expenditure these Cooperative Sugar Factories (CSFs) became sick and were sold by decision taken by Board of directors at a price much below the reserve price to avail wrongful gain to the purchaser. The purchasers had personal or political links to the board of directors and the consent of borrowing units were not taken before undertaking such sale, clearly shows the dishonest intentions on part of Board of directors. Following irregularities were found in the sale of these units by Board of directors of MSCB.

• The CSFs were sold at a price much lower than the reserve price.

• Further, there was no rules followed to the fix the reserve price as it was fixed on basis of the interest of the purchasers be it market value, Realizable value or Distress value of the property.

• Forged documents like sale certificate were made in some instances in which the actual sale (As per sale deed) was done at much lower level than mentioned in sale certificate.

• Sale were at instances done without inviting the tender.

Thus, the directors flouted various NABARD, RBI and SARFAESI Guidelines by sanctioning illegal loans, giving loans to the related parties without disclosing it to the bank and showing it as related party transactions. Thereafter, selling off units at throwaway prices to relatives. There was huge misappropriation of funds on part of committee members and directors and loan committee members of MSC bank, acting in connivance to siphon off the money and in process causing huge losses to the bank.

Further investigation in the matter is under progress, ED official said.