Covid jumbo centres scam: Rs 22 crore laundered through shell companies, says ED probe

Suraj Chavan grilled

On Monday, the ED grilled Yuva Sena functionary Suraj Chavan, a close aide of Shiv Sena (UBT) MLA Aaditya Thackeray, for more than eight hours. Chavan who reached ED’s Ballard Estate office at 12.30pm was let off by 8.45 pm. Chavan is suspected to be one of the four middlemen identified by the ED in the scam. His name has reportedly cropped up in four to five contracts and cash transactions linked to Chavan are being scrutinised.

The probe has also revealed that Chavan’s brother has three companies, one of which was shut down and two were opened around the time of the Covid-19 pandemic. The ED is checking the money flow in these companies.

The ED has also identified Chavan’s four flats worth nearly Rs 10 crore in suburban Mumbai that were allegedly bought during the pandemic. When he was asked about these flats, he could not give satisfactory answers and was asked to produce documents supporting the claims, officials said.

The officials also scanned Chavan’s WhatsApp chats with suppliers, contractors and civic officials where money related matters were discussed. According to the officials, as a middleman, Chavan was directly involved in five contracts given to select contractors. Some of them were not eligible, while some others charged higher rates, officials said. In connivance with civic officials, Chavan also helped some bidders prepare bids and qualify, sources privy to the probe said.

The agency also accessed the contents of a diary with details of cash transactions with suppliers. Chavan has been called again after 3-4 days along with the documents of properties linked to him that the ED has found.

Jaiswal seeks time

IAS officer Sanjeev Jaiswal who has been summoned by the ED, has sought three-four days time to join the probe. Jaiswal’s role as an additional municipal commissioner of the BMC during the Covid-19 is under ED’s scanner.

A 1996-batch IAS officer, Jaiswal is now the vice-president and chief executive officer of the Maharashtra Housing and Area Development Authority (MHADA). He was summoned to appear at the ED’s Ballard Estate office on Monday. Sources said that the ED wanted to record Jaiswal’s statement as he was a key BMC functionary who signed the documents pertaining to awarding of contracts for healthcare services, staff and equipment at the Covid field hospitals.

The central agency wants to find out what criteria were followed while awarding contracts to firms linked to Patkar. On June 21, the agency conducted raids on 14 premises in Mumbai, including Jaiswal’s Bandra residence, and another location. They seized Rs 13 lakh cash and property documents from Jaiswal’s premises. According to sources, his properties worth more than Rs 100 crore are under scanner.

‘No immunity’

After the ED’s crackdown on the scam, officials without coming on record have been raising queries on how the agency can investigate the functioning of BMC when the Disaster Management Act was in effect. Decisions taken by the government authorities when this Act was in effect cannot be subjected to audit, they say.

In December 2022, the BMC had even written to the Comptroller and Auditor General (CAG) about the same. However, ED officials say that provisions of Disaster Management Act or any other laws do not give immunity to any public servant indulging in criminal acts.

The case

The case related to the Covid-19 jumbo centres scam was registered by the Mumbai police in August 2022 at the Azad Maidan police station on a complaint by BJP leader Kirit Somaiya. In October 2022, the case was transferred to the Mumbai police’s Economic Offences Wing (EOW). Later, the ED registered a PMLA case in the matter.

The case relates to the field hospitals set up in Mumbai by the government during the Covid-19 pandemic. The BMC was tasked with providing healthcare staff and other facilities on a contract basis. The BJP alleged that contracts were given at exorbitant rates to contractors linked to Shiv Sena leaders who had no prior experience in healthcare services.