MSCB case closure report: ‘No criminal offence’, says EoW, clearing Ajit Pawar, wife Sunetra and nephew Rohit

The EOW filed a closure report in January, stating that no offence is made in the MSCB case, details of which were made available on Tuesday. The case relates to allegations that loans were given to sugar factories by the MSC Bank, without following procedures. After they turned into non-performing assets, they were sold to the kin of those linked to the bank’s directors and others at lower than market price, it was alleged.

If the closure report is accepted, it will also affect the connected Enforcement Directorate (ED) probe, where two chargesheets have so far been filed. The ED case cannot continue without a predicate offence, which is the EOW probe.

The 35-page report of the EOW refers to three key transactions and states that none of those show that there was any criminal offence or irregularities in the grant of loans or the sale of the sugar factories.

Ajit Pawar-Sunetra Pawar

The transaction relates to the sale of Jarandeshwar Sugar Sahakari Karkhana, a sugar factory that was operational in Satara. The ED probe said that the factory was sold to one Guru Commodity Services Ltd in 2010 at Rs 65 crore, after its finances deteriorated, despite taking loans from cooperative banks.

The ED alleged that loans were given to the sugar factory by banks, including the Pune District Central Cooperative Bank, of which Ajit Pawar was the director from 1995, and after it became a non-performing asset, its sale was at a “throwaway price” with companies linked to his relatives.

It was alleged that the money to buy the factory was given to the buyer by two other companies — Jarandeshwar Sugar Mills (JSM) Pvt Ltd and Jay Agrotech. Pawar’s wife Sunetra, who is the Lok Sabha contestant for his party from Baramati, was the director of Jay Agrotech till 2008 and his uncle, Rajendra Ghadge, was the director of JSM.

The ED has named Guru Commodity, JSM and a chartered accountant, linked to this transaction, as accused.

The EOW said that the sale of the factory was not at a throwaway price but was Rs 19 crore more than the reserve price. It also specified that when the transaction took place, Sunetra was not linked to Jay Agrotech as she was the director from April 1, 2004 to July 18, 2008 and not during the sale.

“Ajit Pawar’s uncle Rajendra Ghadge was the director of Jarendeshwar Sugar Mills and his wife Sunetra Pawar was the director of Jay Agrotech, two years before the sale transaction. However, the sale of the sugar factory was done as per orders of the Bombay High Court in 2010 and the SARAFESI Act,” the EOW report states, ruling out any irregularities in the sale.

Rohit Pawar

The ED is probing the sale of Kannad SSK by Baramati Agro Ltd in 2012 It has alleged that the Rs 50 crore used to buy the sugar factory was through various bank accounts. It claims that the amount instead of being used for its stated purpose of working capital, was used for buying the sugar factory.

The agency also claimed that one more company, which participated in the auction, was also given Rs 5 crore by Baramati Agro, alleging irregularity in the process.

The EOW has said that the perusal of the documents in the transaction showed that in 2011, an administrator was appointed by the government for the functioning of the bank after dissolving its board. “The sale was during the tenure of the administrator and as per the SARAFESI Act. Hence, there is no evidence that the sale was linked to relatives of the director of the bank,” the EOW has said. It also said that the money was used from cash credit accounts to save losses on interest.

Prajakt Tanpure

The ED has named Tanpure, former NCP MLA Prasad Tanpure, Eknath Shinde-led Shiv Sena former MLA Arjun Khotkar and former Congress minister Ranjeet Deshmukh among others as accused in its supplementary chargesheet filed in 2023.

This relates to sale of Ram Ganesh Gadkari SSK by Prasad Sugar and Allied Agro Products Private Limited . The ED alleged that Prasad was the board of directors of the MSCB when his son bid through the company to buy the sugar factory. Here too, the EOW has concluded that no losses were caused to the bank and the transactions were under the SARAFESI Act.

The EOW has also addressed the issues in the previous closure report filed by the EOW in 2020 flagged by original petitioner Surinder Arora, who had filed a PIL in the case in the high court. The EOW has said that there was no proof of conflict of interest or irregularities in the loans and sale of the sugar factories. It also said that a retired judge appointed in 2020 for an independent inquiry into the transactions had also concluded in his report in February 2021 that no financial losses were caused due to the loans.

The case has seen multiple flip flops since 2020. In 2020, when Maha Vikas Aghadi was in power, the EOW had said that there was no criminal offence committed. In October 2022, the agency said that it wanted to continue the probe, keeping aside its closure report, after the BJP-Shiv Sena came to power. In January 2024, months after Pawar became the deputy chief minister again, the EOW said that there was no offence committed. The court is yet to decide on the report.