March 10, 2021 1:53:49 am
The Enforcement Directorate’s (ED) Lucknow zonal office on Tuesday attached seven non-functional sugar mills owned by former MLC Mohammad Iqbal and his family under the Prevention of Money Laundering Act. According to the agency, the land on which the mills are located are worth Rs 1,097.18 crore.
The ED has alleged that sugar mills were sold to Iqbal and his family at throwaway prices — only Rs 60.28 crore — during a disinvestment drive in 2010-’11. The investigative agency had lodged the case against Iqbal and others based on the probe conducted by the Serious Fraud Investigation Office (SFIO) of the Ministry of Corporate Affairs in 2010-’11. The SFIO had investigated Iqbal and the others for allegedly acquiring assets through illegitimate means.
According to the ED, two shells companies controlled by the former legislator and his family — Namrata Marketing Private Ltd and Giriasho Company Private Ltd — participated in the bidding process when the UP government disinvested its stake in sugar mills in 2010-’11 and acquired seven of them with illegitimate money laundered through various shell companies that had dummy directors and conducted sham transactions.
In its press release, the agency said that during its investigation the statements of Iqbal’s key associates, accommodation entry operators and dummy directors of various companies were recorded. Evidence was also collected from banks, the Ministry of Corporate Affairs, the district property registration authorities and the Income Tax department. The residences of Iqbal and his associates in Saharanpur and related premises in Delhi were also searched and incriminating documents, valuables and records were recovered, the ED added.
The investigation revealed that in 2010-’11, the shell companies controlled by Iqbal and his family participated in the bidding process of sugar mills operated by the Uttar Pradesh Rajya Chini Avam Ganna Vikas Nigam Limited (UPRCGVNL).
“The companies did not submit the share-holding pattern and background of key promoters, which were stipulated conditions at the time of bidding. It is also noticed during investigation funds were infused either into these companies through cash deposits made in shell companies’ bank accounts and further routed into these two companies through sham transactions or there was an infusion of funds disguised in the form of share application money for subscription to shares of these two companies at a high premium,” said the ED.
The agency claimed that for the purpose of registration and execution of the sale deeds, the two companies purchased seven paper companies. All these companies were incorporated on the same date in 2011. The former MLC and his associates then purchased the seven sugar mills, three of which are in Kushinagar and one each in Bareilly, Deoria, Hardoi, Barabanki.
According to the ED, the performance audit report by the Comptroller and Auditor General of India (CAG) on the sale of sugar mills of the Uttar Pradesh State Sugar Corporation Limited for the 2010-’11 financial year also highlighted the administrative and financial discrepancies and irregularities in the disinvestment and sale processes of the sugar mills in Bareilly, Kushinagar, Hardoi, Deoria and Barabanki.
The CBI has also lodged a case to investigate the sale of the mills to these companies and the non-compliance of the stipulated rules and procedures by some government officials.
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