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Tuesday, November 24, 2020

MSCB case: Probe needs to establish conflict of interest, agency has locus to intervene, ED tells court

In its rejoinder filed before the special court on Tuesday, the ED said that it has locus standi to intervene in the proceedings, opposing the EOW closure report as it is a public interest matter.

Written by Sadaf Modak | Mumbai | October 28, 2020 3:53:50 am
Maharashtra State Cooperative Bank case, ED probe, Money Laundering Act, Mumbai news, Maharashtra news, indian express newsThe ED is carrying out its investigation into allegations under the Prevention of Money Laundering Act (PMLA) by former directors and other members of the MSCB claiming irregularities in loan transactions.

Dismissing claims that the Enforcement Directorate (ED), which has opposed the Economic Offences Wing (EOW) clean chit to Deputy Chief Minister Ajit Pawar and at least 74 others in the alleged Maharashtra State Cooperative Bank (MSCB) fraud case, is “taking undue interest” in the matter, the central agency has said a probe needs to establish conflict of interest of authorities involved in the case. Four protest petitions were also filed before the court today opposing the EOW closure report, including two MLAs, Shalinitai Patil, the 87-year old wife of former Chief Minister late Vasantdada Patil and Manik Jadhav, stating apprehensions that the probe was not carried out in an impartial manner.

In its rejoinder filed before the special court on Tuesday, the ED has said that it has locus standi to intervene in the proceedings, opposing the EOW closure report as it is a public interest matter. “Public interest being of paramount importance, the locus of this Directorate cannot be questioned being a public authority discharging its duties in the larger public interest while enforcing the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) amongst others,” the ED has said in its rejoinder.

The ED is carrying out its investigation into allegations under the Prevention of Money Laundering Act (PMLA) by former directors and other members of the MSCB claiming irregularities in loan transactions. “This Directorate (ED) has locus to intervene in the matter as closure of the case by EOW, if accepted by this Hon’ble Court, may influence the case being investigated under the PMLA at later stage,” the ED has said.

The ED in its intervention application filed last month had referred to alleged irregularities in at least two transactions of the MSCB including one involving relatives of Pawar, who was the then director of the bank. It claimed that a sugar cooperative, Jarandeshwar Sugar Sahakari Karkhana (SSK) which was auctioned in 2010 by MSCB for non-payment of loans was purchased by Guru Commodity Private Limited. It was then given on an annual lease to a newly incorporated company called Jarandeshwar Sugar Mills whose director Rajendra Ghadge is the maternal uncle of Pawar. The ED further claimed that this new company had received funds of Rs 20 crore from Jay Agrotech Pvt Ltd, wherein Pawar’s wife Sunetra, is a director. The ED seeks that the court reject the closure report and direct EOW to continue its probe claiming alleged money laundering.

The EOW has said that there is no material against Pawar and others as per its probe. In its closure report, EOW has said that their probe did not reveal any irregularities in loan transactions. In a reply filed to the ED seeking to oppose the closure report, the EOW has said that since the central agency is neither a complainant or victim and is not concerned with the EOW probe, it does not have a locus standi. The EOW has also said that the investigation was “thoroughly and categorically” done and interference in investigation by another agency is “unwarranted and without jurisdiction”.

The closure report also claimed that specific allegations regarding procedures not being followed while granting loans, legal recourse not taken for non-repayment and loans being given at the end of financial year, are of a civil nature and a criminal offence cannot be made out of them.

Meanwhile, the four protest petitions filed before the special court on Tuesday include the complainant, Surinder Arora, a former MLA Manik Jadhav and a chairman of one of the sugar factories, Shalinitai Patil. The petitions among other prayers seek a probe by a central investigating agency alleging that the EOW under the aegis of the coalition government in the state “would not conduct an impartial and transparent investigation”.

Patil, 87-year old chairman of Jarandeshwar SSK, said that the bank had sold the sugar factory “in the most arbitrary manner” to Guru Commodity. The petition claims that the tendering process for the auction was manipulated and has sought a probe into the money trail of the company claiming links with the accused. Her petition also claims that one of the EOW investigators had written to one of the men, a senior political leader, during the probe that no offence was made against him in the case.

The court will first hear the EOW and other parties on whether these intervention and protest applications can be allowed. Following this, the court can accept or reject the EOW closure report. An FIR was filed in the case after directions from the Bombay High Court in 2018 on a Public Interest Litigation filed by Arora.

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