The shoe that pinched

Files on the multiple cases of the shoe scam, sources say, are gathering dust on court shelves. Ask Majid Memon, one of the defence lawyers for main accused Sadruddin Hasan Daya former city sheriff and socialite and Abu Asim Azmi now a Rajya Sabha MP and Samajwadi Party leader, and he agrees. 8216;8216;Yes, the files are gathering dust. We do not know when the process of recording of evidence in the case will commence although crores are involved in the scam.8217;8217;

At present, the shoe scam is in a queue of cases waiting to be taken up by the court of the 19th additional chief metropolitan magistrate. All the accused are out on bail.

It wasn8217;t always this unsung. Detected in 1995, this Rs 1,600 crore case involved over 40 persons and was investigated for almost two years. Among those implicated were Sadruddin Daya Dawood Shoes, Azmi Citywalk Shoes, Rafiq Tejani Metro Shoes and Kishore Singapurkar Milano Shoes, bureaucrats and officials of Bank of Baroda, Saraswati Bank and the Bombay Mercantile Co-operative Bank.

For years the shoe companies had managed to take advantage of a government scheme meant to benefit poor cobblers. In order to apply for loans to banks and for tax concessions, the cobblers had to form co-operatives. This is where the shoe companies moved in. They floated co-operatives that had fictitious members, applied for loans and got the concessions meant only for the cobblers. Under the central government scheme, the leather co-operatives or societies got a 100 per cent income tax exemption, sales tax exemption up to Rs 50 lakh, reduction in octroi and other facilities within the purview of the government subsidiary schemes.

It was much later that the Brihanmumbai Municipal Corporation8217;s octroi department noticed that the sheer volume of raw material that was coming to Mumbai with octroi concession was just too large. There simply weren8217;t that many cobblers in the city. Based on their complaints, the police started investigations.

After taking charge as the joint registrar of Co-operative Societies for Mumbai division in 1995, Sudhir Thakre ordered a survey of the leather co-operative societies and found that most of these didn8217;t exist at their registered offices.

According to the chargesheet filed by the Mumbai Police CB/CID/CR Number 95/96, about 14 leather co-operative societies which were floated under a scheme of the Central Government for the upliftment of the weaker section cobblers by providing them loans at lower interest rates, were misused to extract crores from nationalised and co-operative banks and the Maharashtra State Finance Corporation in the names of bogus/non existent members by the accused.

Investigations revealed that bogus records and documents were prepared. The signatures of government officers in the co-operative department and sales tax were found to be forged.

The chargesheet further says: 8216;8216;It is also revealed that the leather societies were initially registered with 10 to 15 members cobblers with authentic documentation. Later the chief promoter and promoters of the societies would get interested parties to admit 1000 to 5000 bogus members. Through the society these 8216;members8217; would apply to banks for loans to purchase leather and equipment.8217;8217;

Officials of Bank of Baroda, Saraswati Co-operative Bank and the Bombay Mercentile Co-operative Bank are also facing charges for fraudulent manipulation of government funds.

After the inquiry, Dawood, Metro, Milano, Citywalk and a host of other shoe shops were sealed. They opened only after a long battle.

Today, fighting multiple cases with various government departments Daya has shut down Dawood Shoes. The others shoe shops are doing brisk business.