Rs 870 crore money trail: Why the Bhujbals are under scanner

Since 2009, former Maharashtra deputy CM and PWD minister Chhagan Bhujbal has faced charges in award of contracts. Now comes the first arrest, of his nephew Sameer Bhujbal.

Written by Khushboo Narayan | Mumbai | Updated: February 3, 2016 10:40 am
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Why has Sameer Bhujbal been arrested by the Enforcement Directorate (ED)?

Sameer Bhujbal is a former MP and nephew of former Maharashtra deputy chief minister and NCP leader Chhagan Bhujbal. Sameer also controls several private firms floated by the Bhujbal family along with Chhagan Bhujbal’s son Pankaj Bhujbal. The ED has alleged that the books of accounts of some of these firms reflect unexplained transactions which, the agency suspects, are nothing but “kickbacks received by the Bhujbals”. Sameer, who was summoned by the ED to explain these transactions, reportedly evaded the department’s questions and hence was arrested under Section 19 of the Prevention of Money Laundering Act (PMLA).

What are the kickbacks the ED is referring to?

On June 17, 2015, the ED filed a case under the PMLA against Chhagan Bhujbal and his kin for money laundering. This was after the Maharashtra Anti-Corruption Bureau (ACB) searched 26 properties of Chhagan Bhujbal as part of its investigations into alleged irregularities in the award of a contract of over Rs 100 crore for three projects in 2006 when Bhujbal was deputy CM and PWD minister. The contact which was given to M/s Chamankar Developers included construction of Maharashtra Sadan in Delhi, a new Regional Transport Office (RTO) building in Andheri, and a state guest house at High Mount, Malabar Hill, Mumbai. It is alleged the contracts were awarded without following rules and that, in return, firms and trusts controlled by the Bhujbal family received kickbacks.

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What was the trigger for the ACB probe?

In 2012, BJP leader Kirit Somaiya approached the ACB seeking an inquiry against Bhujbal in the Maharashtra Sadan case. Later, Anjali Damania, then with the Aam Aadmi Party, filed a PIL in the Bombay High Court seeking an FIR against Bhujbal and alleging that between February 12, 2010, and January 20, 2012, Chamankar Enterprises gave Rs 74.10 lakh to Ideen Furniture, whose directors are Vishaka Bhujbal, wife of Bhujbal’s son Pankaj, and Shefali Bhujbal, wife of his nephew Sameer.

Earlier, a 2009 CAG report had passed strictures against the Bhujbal-led PWD and other state departments for “acts of omission and commission”, allegedly leading to a windfall gain for the contractor, leading to the constitution of a Public Accounts Committee (PAC).

While the ACB pegs the losses to the government from the three projects at Rs 2,867.25 crore, the PAC had pegged the notional loss to the government at Rs 5,000-6,000 crore.

What had been done after the ACB probe?

The ACB submitted a report to the government on October 14, 2014, a day before Maharashtra went to polls. On October 22, even as the BJP was contemplating an offer of “unconditional” outside support from the NCP, the Home Department sanctioned an open inquiry.

On December 19, 2014, following a Bombay High Court order, an SIT was set up to probe the allegations. On June 11, 2015, the ACB registered an FIR against Chhagan Bhujbal and 16 others, three days after it had filed a separate FIR against Bhujbal in connection with alleged irregularities in the contract given for the construction of a library in Kalina, central Mumbai.

The same week, the Navi Mumbai police registered an FIR against Pankaj and Sameer Bhujbal for alleged fraud in the Hex World housing society case.

The Bombay High Court on January 28 sought progress reports from the ACB and ED in four weeks on their probe against Bhujbal and his family members.

How many charges do Chhagan Bhujbal and his kin face?

The agencies are investigating nine charges against the Bhujbals. Some of them include allegations pertaining to redevelopment of MIG colony in Bandra and alleged kickbacks to Parvesh Constructions, a company where Pankaj and Sameer Bhujbal are directors, allegations of corruption in awarding several contracts such as for State Central Library on the Kalina campus of Mumbai University, for Mumbai-Nashik toll road and bridges among others. The ED is also probing transfer of Rs 30 crore from the account of Armstrong Energy Pvt Ltd to two of its wholly-owned companies Armstrong Global and Armstrong Infrastructure in Singapore. Pankaj and Sameer are the directors of Armstrong Energy Pvt Ltd.

What happens next?

On Monday, the ED searched nine properties owned by Chhagan Bhujbal and his family in Mumbai, including the Mumbai Education Trust, an institute run by the Bhujbals in Bandra, as part of its investigations under the PMLA. The ED has attached properties of over Rs 280 crore belonging to the Bhujbal family. According to ED officials, it may arrest more people for alleged money laundering in the case for probe.

What is Bhujbal’s defence?

The Bhujbals have alleged political vendetta by the BJP-Shiv Sena government. On Monday, at a press conference, NCP chief Sharad Pawar said the Bhujbal family is being targeted and accused the government of “ blatant misuse of power”.