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Why the Enforcement Directorate has swooped on NCP leader Chhagan Bhujbal

Indian Express gives the background of the cases and probe against the Maharashtra Deputy Chief Minister who was arrested on Monday.

Written by Khushboo Narayan |
Updated: March 16, 2016 11:22:01 am
money laundering, bhujbals, chhagan bhujbal, mumbai news, mumbai money laundering case, enforcement directorate, NCP leader and former Deputy CM of Maharashtra, Chhagan Bhujbal who is currently in jail

Why has the Enforcement Directorate (ED) arrested Chhagan Bhujbal?

Chhagan Bhujbal, former Deputy Chief Minister of Maharashtra, was arrested by the ED on Monday after he failed to explain the sources of cash allegedly received by companies controlled by his relatives. The ED has alleged that this money was received in lieu of projects awarded to contractors when Bhujbal was the PWD Minister of the state between November 2004 and September 2014. While Bhujbal was not a director in any of the companies allegedly floated by his son, Pankaj Bhujbal, and his nephew, Sameer Bhujbal, he is alleged to have been the recipient of the kickbacks.

So, what exactly are these kickbacks that the ED is talking about?

On June 17, 2015, the ED filed a case under the Prevention of Money Laundering Act (PMLA) against Bhujbal and his relatives. This came after the Maharashtra Anti-Corruption Bureau (ACB) searched 26 properties belonging to 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, Mumbai, and a state guest house at High Mount, Malabar Hill, Mumbai.

It is alleged that the contracts were awarded without following rules and, in return, firms and trusts controlled by the Bhujbal family received kickbacks. In 2009, a report by the Comptroller and Auditor General (CAG) passed strictures against the Bhujbal-led PWD and other state departments for “acts of omission and commission” that had led to windfall gains for the contractor. While the ACB probe pegged the losses to the government from the three projects at Rs 2,867.25 crore, a probe by the Public Accounts Committee (PAC) of the Maharashtra legislature put the notional losses at between Rs 5,000 crore and Rs 6,000 crore.

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On February 1, the ED arrested Bhujbal’s nephew Sameer, who is now in judicial custody until March 22. The agency has also zeroed in on over a dozen companies based in Kolkata, which bought shares in companies fully owned and controlled by the Bhujbals on unrealistic premiums, that were later channeled through various companies to start real estate projects in the country. The ED has questioned Bhujbal’s chartered accountant, and a market operator, who have pointed to alleged hawala transactions by companies owned by the Bhujbals.

What set off the probe by the ACB?

In 2012, BJP leader Kirit Somaiya approached the ACB, seeking an inquiry against Bhujbal in the Maharashtra Sadan case. Later, Anjali Damania, who was then with AAP, filed a PIL in 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.

What happened then?

Following Somaiya’s complaint, the ACB conducted a discreet inquiry and 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 HC order, an SIT was set up to probe the allegations. On June 11, 2015, the ACB registered an FIR against 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.

That same week, the Navi Mumbai police registered an FIR against Pankaj and Sameer in the Hex World Housing Society case, which pertains to alleged fraud in the construction of a residential building in Navi Mumbai.

On January 28, the HC sought progress reports from the ACB and ED in four weeks on their probe against Bhujbal and members of his family.

What are the charges against Bhujbal and his kin?

The agencies are investigating nine charges against the Bhujbals. Some of them include allegations pertaining to redevelopment of MIG Colony in Bandra, Mumbai, and alleged kickbacks to Parvesh Constructions, a company in which Pankaj and Sameer Bhujbal are directors, allegations of corruption in awarding several contracts such as for the State Central Library at the Kalina campus of Mumbai University, and the Mumbai-Nashik toll road and bridges, etc. The ED is also probing a 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 directors of Armstrong Energy Pvt Ltd.

What is Bhujbal’s defence?

The Bhujbals have alleged political vendetta by the BJP-Shiv Sena government. On Tuesday, Chief Minister Devendra Fadnavis said Bhujbal’s arrest was not a case of “revenge politics”. “We will not extend any help in hiding scams,” he said.

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