The CBI has registered an FIR and initiated six preliminary enquiries in connection with alleged irregularities and corruption in disinvestment of 21 sugar mills in Uttar Pradesh during BSP chief Mayawati’s regime. The case had been recommended for a CBI probe by the Yogi Adityanath government in April last year, but has been given a go-ahead by the Centre only now.
The CBI, which has basically taken over the 2017 FIR registered by Gomti Nagar police station in the matter, has arraigned as accused seven people — identified as Rakesh Sharma, Dharmendra Gupta, Saurabh Mukund, Mohammed Javed, Suman Sharma, Mohammed Naseem Ahmed and Mohammed Sajid. All these accused were listed as directors in two alleged shell companies which won the bid for the sugar mills.
According to the FIR, in 2010-11, the UP government disinvested 21 sugar mills — 11 of which had already shut down — run by UP State Sugar Corporation and its subsidiary UP Rajya Chini Evam Ganna Vikas Nigam. The sugar mills of Deoria, Bareilly, Lakshmiganj (Kushinagar) and Hardoi were bought by Namrata Marketing Pvt Ltd. In the purchase process, the company had submitted Expression of Interest (EOI)-cum-Request for Qualification (RFQ). The documents also had the company’s balance sheet, duly signed by its directors, attached.
Similarly, for the purchase of mills in Ramkola, Chhitauni and Barabanki, Giriyasho Company Pvt Ltd submitted EOI-cum-RFQ on October 19, 2010, with the company’s balance sheet signed by its directors.
Based on these documents, the disinvestment committee sold the mills to the companies. However, in 2017, the Serious Fraud Investigation Office (SFIO) submitted a report with the government highlighting alleged irregularities, including submission of forged documents, in the disinvestment process.
The balance sheet for 2008-09 submitted by Namrata Marketing had signatures of its directors Rakesh Sharma and D K Gupta. Similarly, Giriyasho’s 2008-09 balance sheet was signed by DK Gupta and Suman Sharma. Investigations by SFIO found that the two companies had been bought by its new owners from one Suresh Kumar Gupta in 2010. However, there was no share allotment or transfers. The companies’ balance sheets were found to have been fabricated as there were no corresponding financial transactions in their bank accounts. Even the company addresses mentioned in documents submitted with the disinvestment committee were found to be residential premises of some of the directors.
During interrogation, directors of the company either said they signed the documents on instructions from Suresh Gupta or completely denied having signed any document of the company and denied any links with the companies. The SFIO held that the companies appeared to have been incorporated only on paper purely for moving money in transactions related to sugar mills’ sale.
The sale of the sugar mills came under suspicion in 2010-11 when the opposition in the state alleged financial embezzlement in the disinvestment process.
A report by the Comptroller and Auditor General on the disinvestment was tabled in the Assembly in 2012. It estimated a loss of Rs 1,179.84 crore to the state exchequer in the sale of the mills. The report had alleged financial irregularities and under-valuation in the sale of land and machinery of the mills.
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