AN investigation by Mumbai Police into loans sanctioned by Maharashtra State Cooperative Bank (MSC Bank) to sugar factories and subsequent auction of sick factories, has found irregularities in the auction and sale of one such sugar factory to Baramati Agro Ltd, a company owned by NCP MLA Rohit Pawar, a nephew of Deputy Chief Minister Ajit Pawar.
Ajit Pawar was a director in MSC Bank from 2007 till the board was dissolved by the Reserve Bank of India in May 2011. Both the Economic Offences Wing of Mumbai Police and the Enforcement Directorate have named Ajit Pawar as an accused in cases registered in August and November last year, respectively, in connection with loan irregularities in MSC Bank.
According to sources, Kannad Sahakari Shakar Kharkhana Ltd (Kannad SSKL) was auctioned by MSC Bank in 2012 after it defaulted on loan repayments. It was sold at Rs 50.20 crore to Baramati Agro, the highest bidder. The probe has found that at least two other companies, Hitech Engineering Corporation Ltd and Samruddhi Sugars Pvt Ltd, had participated in the auction.
As per rules, the three companies made earnest money deposit of Rs 4.59 crore each to take part in the auction. Police investigation has now revealed that Baramati Agro made the earnest money deposit for Hitech Engineering too. Sources said Hitech Engineering received Rs 5 crore from Baramati Agro on August 25, 2012. Two days later, Hitech transferred Rs 4.59 crore to MSC Bank for participating in the auction of Kannad SSKL.
Responding to a detailed set of questions, Rohit Pawar, CEO, Baramati Exports, said, “To the best of our knowledge and information, no such finding has been communicated to us by any Investigation Agency, till date and therefore, we still believe that the matter put forth in your email is under investigation and yet to be adjudicated. Moreover, as subject matter investigation is already sub-judice before the Hon’ble High Court of Judicature at Mumbai, we are not supposed to comment about intricacies in the same, unless and until Investigation Agency and/or Judicial Authority, formally requires us to do so.” He also said the “facts are misconceived, misinterpreted and devoid of merits”.
MSC Bank did not respond to a list of questions sent by The Indian Express.
In August, 2019, the Bombay High Court had ordered the EOW to register an FIR against Ajit Pawar and others in connection with the alleged loan scam at MSC Bank causing it an estimated loss of Rs 1,000 crore between 2007 and 2011.The court noted that the police had not filed an FIR despite a Nabard 2009-10 inspection report and chargesheet filed by a quasi-judicial inquiry commission under the Maharashtra Cooperative Societies (MCS) Act revealing “glaring irregularities”.
The EOW then registered an FIR against Ajit Pawar and 70 former functionaries on charges of cheating and forgery. Apart from the EOW, the Enforcement Directorate (ED) too named both Ajit Pawar and NCP chief Sharad Pawar in its Economic Case Information Report in connection with the case.
According to the financial report of Baramati Agro, Ajit Pawar was also a shareholder in Baramati Agro when it won the bid for Kannad SSKL in 2012. After acquiring Kannad SSKL for Rs 50.20 crore, Baramati Agro raised about Rs 120 crore (more than twice the acquisition value) in May 2013 from a state owned bank by mortgaging a part of the assets of Kannad SSKL.
The 2016 annual report of Baramati Agro lists Sharad Pawar, his nephews Rajendra Pawar and Ajit Pawar, his grand nephew Rohit Pawar, wife Pratibha Pawar and daughter Supriya Sule among others as shareholders.
Financial records of Hitech Engineering, the firm that allegedly received money from Baramati Agro, show that in 2012-13, the firm reported profits of Rs 7 crore. However, in 2016-17, Hitech Engineering declared bankruptcy and has been liquidated since, according to the records. While it owes Rs 41 crore to creditors, it’s assets have been valued only at Rs 15 crore.
The case pertaining to the alleged fraud at MSC Bank originates from a criminal public interest litigation (PIL) filed on January 28, 2019, before the Bombay High Court. The PIL has alleged that the then top executives i.e. Chairman, MDs, Directors, CEOs, managerial staff of MSC Bank and office-bearers and directors of Sakhar Karkhanas, Soot Girnis and other processing units were provided loans in a fraudulent manner by MSC Bank. The size of the scam is allegedly estimated at around Rs 25,000 crore, sources said.
The loans, according to sources, were provided to cooperative sugar factories by officials of the MSC Bank who were linked to owners of the cooperative sugar factories despite weak financials and negative net worth. Also, no collateral was taken in many cases. It is also alleged that these CSFs became sick due to alleged mismanagement and were subsequently sold by a decision taken by the MSC Bank board at a price much below the reserve price, accruing wrong gains to the acquirers.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines