NCP leader and former Maharashtra Deputy Chief Minister Chhagan Bhujbal was arrested Monday evening after being questioned for over nine hours by the Enforcement Directorate (ED) in an alleged money laundering case which the agency claims caused a loss of Rs 870 crore to the exchequer.
The ED is probing alleged kickbacks received by Bhujbal and his kin for favouring contractors in construction of the Maharashtra Sadan in New Delhi and the Kalina Central Library, works which were awarded when he was state PWD minister — he held the portfolio from November 2004 to September 2014. He started his political career with the Shiv Sena, joined the Congress and later the NCP of Sharad Pawar.
The ED has alleged that the Bhujbals received cash in lieu of projects awarded to contractors and “channeled such illegal cash into various companies and integrated it into business activities” of companies they controlled.
Following Bhujbal’s arrest, an ED officer said: “When we quizzed him on the contracts awarded by him during his tenure as PWD minister, he claimed that the decision was taken by the Cabinet sub-committee. He was non-committal on the sources of cash. Since his answers were unsatisfactory, we arrested him.”
Bhujbal will be produced before the special PMLA court Tuesday. Since he is a sitting MLA, information of his arrest will be communicated to the Speaker of the Maharashtra Assembly.
Summoned to the ED office at Ballard Pier with statements of his bank accounts and documents of his properties, Bhujbal reached there 11.30 am Monday with his lawyer and a few NCP leaders. Entering the office, Chhagan bhujbal
Bhujbal told reporters: “I am a victim of political vendetta but I will cooperate with the investigation.”
Anticipating protests by NCP workers, police issued prohibitory orders in and around the ED premises and deployed over 100 policemen. NCP workers, who turned up there and raised slogans, were taken into preventive custody and let off later. Later, after his arrest, water cannons were also brought in.
ED sources said Bhujbal was questioned on large sums of cash, allegedly laundered with the help of hawala operators into shell companies floated by his nephew Sameer — he has already been arrested — and son Pankaj. The ED has seized passports of Bhujbal and Pankaj.
“Our probe has zeroed in on over a dozen companies based out of Kolkata that bought shares in companies fully owned and controlled by the Bhujbals on unrealistic premiums which were later channeled through various companies to start projects like the Hex World in Kharghar. We suspect that these Kolkata-based companies were floated to reroute the bribes taken while awarding the contracts. The hawala operators took the cash and routed the bribes by floating these companies and buying the shares at high premiums,” a senior ED officer said.
“Both Sameer and Pankaj failed to explain the source of funds that were channeled into their companies. While Chhagan Bhujbal was not a director in any of the front companies floated by his kin, the charges are that these are funds that he allegedly received as kickbacks for favouring contractors for construction of the Maharashtra Sadan and the Kalina Central Library. The focus of our probe is to find out if these companies paid bribes to the junior Bhujbals by purchasing shares of their companies through shell companies in lieu of contracts that the senior Bhujbal helped them bag,” the ED officer said.
Sources claimed that cash was carried in an ambulance to avoid suspicion.
On February 1, the agency arrested Sameer Bhujbal. Seeking his remand, the ED said, “Chartered accountant Sunil Naik deposed that shares of Parvesh Construction Pvt Ltd and Armstrong Energy Pvt Ltd, fully owned and controlled by Bhujbals, were sold to dubious entities against cash at unrealistic high premiums of Rs 990 per share and funds to the tune of Rs 75 crore and Rs 50 crore respectively were channeled by this method.”
“Suresh Jajodia, market operator, stated he had arranged funds in the bank account of Parvesh Construction and Armstrong Energy against cash that he used to receive from MET (Mumbai Educational Trust) office of Bhujbals in Bandra and used to transfer it to his Kolkata-based contacts by using services of certain hawala operators,” the ED stated “Praveen Jain, controller of various companies, admitted he had accepted cash from Naik and in turn arranged cheque payments in the bank accounts of Armstrong Energy in lieu of cash to the tune of Rs 10.50 crore,” the ED stated, adding that his employee Prabhakar Sogam visited MET office on his instruction numerous times and collected cash.
According to the ED, Kolkata-based financial consultant Sanjiv Jain received approximately Rs 8 crore in cash from Naik for arranging cheque payments in the accounts of Parvesh Construction and Armstrong Energy in the name of share purchases at high premiums.
ED officers have claimed that chartered accountant Chandra Shekhar helped the Bhujbals form two companies — Minutex Processors Pvt Ltd and Mangal Sago Pvt Ltd and arranged payments to the tune of Rs 10.24 crore and Rs 15.78 crore in the bank account of Parvesh Construction in the name of share purchases at high premium.
On June 17, 2015, the ED filed two FIRs under the PMLA against Bhujbal, Pankaj and Sameer for alleged money laundering. This was after the ACB searched 26 properties of Chhagan Bhujbal as part of its investigation into alleged irregularities in the award of a contract of over Rs 100 crore for three projects in 2006 when Bhujbal was Deputy Chief Minister and PWD minister.
The contract awarded to M/s Chamankar Developers included construction of Maharashtra Sadan in Delhi, a new Regional Transport Office (RTO) building in Andheri, and a state guest house at High Mount in Malabar Hill, Mumbai.