On January 30, 2010, the Chhagan Bhujbal Public Welfare Foundation Trust was formed. Three days later, it wrote to Indiabulls Realtech Ltd, seeking a sponsorship sum of Rs 1 crore for the Nashik Festival, a socio-political event by NCP leaders. Seven days after Indiabulls Realtech’s ‘donation’ was deposited in the trust account at the Nashik branch of Saraswat Bank, its parent firm, Indiabulls Real Estate Ltd, bagged a contract to construct the Central Library in Kalina, Mumbai.
In January 2011, Indiabulls Realtech again sponsored the same event. On February 10, nine days before it ‘donated’ Rs 1.5 crore, a 99-year lease was given to Indiabulls Real Estate Ltd for the Kalina land.
In its chargesheet against former Maharashtra deputy chief minister Chhagan Bhujbal in the Kalina Central Library construction case, the Anti-Corruption Bureau has referred to these two instances of alleged quid pro quo to conclude a “chronological proximity” between payments made to the Bhujbal-controlled trust and favours ostensibly extended to Indiabulls Real Estate Ltd.
“Rs 2.5 crore paid by the builder was nothing but kickbacks received under the garb of title sponsorship by Chhagan Bhujbal for favouring the developer,” states the chargesheet.
Indiabulls is not an accused in the case. The ACB has, however, attached statements by company officials confirming sponsorship of the festivals.
In his statement to the ACB, the then Indiabulls Realtech CEO, Ranjeet Gupta, claimed the decision to sponsor the event was based on available budget and the company’s CSR policies.
The ACB, however, has referred to a Ministry of Environment and Forests communication on where money can be spent under the head of CSR activities. The ACB contends that the guidelines stipulate money can be spent for the uplift of poor, vocational training, etc, but sponsoring a “star-studded night where several Bollywood artistes will perform live on stage” cannot be a CSR activity.
The chargesheet states there was “chronological proximity” of Indiabulls Real Estate Limited getting favours and its sister firm sponsoring the Nashik festivals in 2010 and 2011.
Incidentally, Sameer Bhujbal, signing authority for the trust’s bank account, withdrew Rs 60 lakh in cash from the account between January 21 and January 28, 2011, weeks before the second donation was made by Indiabulls Realtech.
When contacted by The Indian Express, Indiabulls said no favours were extended by Bhujbal since the project was sanctioned by a state Cabinet sub-committee headed by the Chief Minister.
“The project was sanctioned by the Cabinet sub-committee and not an individual person. There is no truth to the allegation that Bhujbal extended favours to us,” a representative of the company said.
The company also said there was no “chronological proximity” between bagging of the contracts and the donation paid by one of its group companies for CSR activities. “The 99-year lease was granted after we paid the bank guarantee of Rs 145.73 crore. The said bank guarantee was paid in January 2011. The next month, we bagged the contract,” the representative said.
The chargesheet also states that Indiabulls won the contract for the Central Library despite failing to meet tender conditions.
The ACB claims that Anil Gaikwad, an erstwhile superintending engineer with the PWD, and external chartered accountant Ravindra Sawant, who was engaged by the state government for the project, misinformed the government on the tender process. Both Gaikwad and Sawant are accused in the case.
According to the chargesheet, on July 3, 2009, Gaikwad wrote to the PWD chief engineer, informing him about the appointment of M/s Sawant & Company as chartered accountant for the project. The ACB says a notification announcing that prior permission must be sought before engaging an external auditor was released only on July 17, 2009, but Gaikwad, on his own, had appointed Sawant as external auditor almost a fortnight earlier.
Gaikwad’s letter stated that the state government would grant permission to Sawant since similar services were availed from Sawant during the Andheri Rest House construction project (part of the Maharashtra Sadan scam). “… with expectation, we are appointing Sawant & Company as chartered accountant in this case too,” Gaikwad stated in his letter.
On Sawant’s role, the ACB chargesheet says his accounting firm wrongly showed Indiabulls Real Estate Ltd as eligible for the bidding process.
Between March and May 2009, 11 developers purchased tender documents for the Central Library project. On June 8, 2009, only four companies submitted bids — Drushti Infra Project Ltd, Kumar Company, Ahluwalia Construction (India) Ltd and Indiabulls Real Estate Ltd.
Minimum technical criteria included a turnover of Rs 14 crore for each of the last three financial years. The ACB says Indiabulls Real Estate Ltd did not meet this criteria but was still shown as eligible for bidding in Sawant’s report.
“While documents submitted by the developer during the bidding process show that Indiabulls Real Estate Ltd combined with India Construction Company Ltd (its joint venture), their combined turnover during the financial year 2006-07 was 13.49 crore. The company thereby was ineligible as it did not meet the requirement stated in the contract. Even though Indiabulls did not meet the criteria, it was still shown as eligible for bidding,” the chargesheet states.
“While Indiabulls was not eligible, Sawant entered into a criminal conspiracy with Anil Gaikwad and forged documents to show Indiabulls was eligible,” the chargesheet states.
Drushti and Kumar were declared ineligible. Ahluwalia, which otherwise met all the tender requirements, lost the bid to Indiabulls.
Last year, during the course of its investigation, the ACB showed the tender document to then Secretary (Roads) of PWD, Sakharam Tamsekar, who said Indiabulls did not fit the selection criteria.
Sawant’s statement was also recorded in the Maharashtra Sadan case in which Bhujbal and his kin have already been chargesheeted as being the “prime movers”. The Enforcement Directorate recently arrested Bhujbal and his nephew Sameer in an alleged money-laundering case connected to the scam. Bhujbal and Sameer are currently lodged at Mumbai’s Arthur Road jail.
Indiabulls also denied allegations levelled by the ACB regarding the tender requirements. “The balance sheet of the company Indiabulls Real Estate Ltd for the year 2006-07 shows that it had a turnover of Rs 45.48 crore, thereby meeting the selection criteria. However, the ACB has taken into consideration only Rs 13.91 crore which was its ‘Income from Operation’ — the income earned through ‘other means’ has not been factored by the agency,” the company representative said.
Regarding the nature of its CSR activities, the company said the activities undertaken were as per directions of the environment department of the state government which was directed by MoEF. “The letter issued by the state body clearly states that a cultural event can be funded under CSR. Since we are not privy to the chargesheet, we are not aware of the MoEF letter it refers to,” the representative said.