Covid centres scam: ED questions SS (UBT ) secy about influencing contracts, assets

Shiv Sena (UBT) secretary Suraj Chavan was questioned by the Enforcement Directorate for over eight hours in connection with alleged irregularities in the BMC?s ?4,000-crore expenditure on pandemic-related contracts. Chavan was questioned about allegations that he had influenced the award of civic contracts to contractors/suppliers of his choice. The agency is also examining the role of five middlemen who allegedly influenced contract conditions to suit their favourite suppliers. The ED probe began with an FIR lodged in August 2022 against the partners of Lifeline Hospital Management Services (LHMS), contracted by the BMC to set up two Jumbo Covid centres.

The Enforcement Directorate (ED) on Monday questioned Shiv Sena (UBT) secretary Suraj Chavan for over eight hours in connection with alleged irregularities in the BMC’s ₹4,000-crore expenditure on pandemic-related contracts.

Mumbai, India – June 26, 2023: Shiv Sena (UBT) leader Suraj Chavan arrives to appear before the Enforcement Directorate for questioning in BMC COVID scam case, at Ballard Pier, in Mumbai, India, on Monday, June 26, 2023. (Photo by Bhushan Koyande/HT Photo) (Hindustan Times)

Chavan arrived at the ED office at around 12.30 on Monday amid a 100-strong posse of policemen from the MRA Marg police station, which had put up elaborate security arrangements to deal with any untoward incident. Around 40-odd party supporters were around the office, but the day passed without incident.

ED sources said that Chavan was questioned about allegations that he had influenced the award of up to four civic contracts to contractors / suppliers of his choice. He was also questioned about the antecedents, including the source of funding, of four flats suspected to be linked to him. “Chavan was in touch with a civic authority in this connection and his assets, at least so far, are unexplained,” an ED source claimed.

The agency is also examining the role of five middlemen, some of whom had claimed to have political contacts, who allegedly liaised between Covid suppliers and certain BMC officials / authorities who are under the scanner as well. ED officials suspect that these middlemen allegedly influenced some contract conditions to suit their favourite suppliers in lieu of favours. The agency has sealed the flat of one such person, who is currently outside India.

“Three or four contractors or suppliers have referred to Chavan in their statements given to the ED for influencing the award of contracts to them,” the ED source said. Such suppliers were allegedly either ineligible to bag the contracts or had supplied services to the civic body at rates that were higher, the source said.

“Chavan was asked about four flats that the ED suspects he is linked to,” the ED source continued. “However, he denied any link with two of the four flats , while he said that he had taken loans, including from friends, to acquire the other two.” The source said that Chavan had not carried the property documents to establish the fact that he had taken loans for the two flats and had sought time to do so.

“It is being verified whether there was any quid pro quo for the award of the contracts,” said the ED source. “For this, three firms set up by Chavan’s brother are also under the scanner for their antecedents and source of funding.” The agency is also verifying when exactly Chavan ‘s two flats and his brother’s three firms came into being, to determine links, if any, with the alleged irregularities.

The ED probe began with an FIR lodged in August 2022 against the partners of Lifeline Hospital Management Services (LHMS), contracted by the BMC to set up two Jumbo Covid centres. According to the FIR, the company got the contract using allegedly forged documents and had no previous experience of providing manpower for any medical facility.

“The money trail in the civic contract to LHMS has been established, which revealed that up to ₹22 crore of the ₹30 crore that the BMC gave to it had been diverted and not used for the stated purposes,” an ED official said. “The probe revealed that out of the ₹22 crore, some parts went to the firm’s partners as deemed profits, while the rest was sent to what we suspect are shell entities.”

After investigations into the LHMS case yielded allegedly incriminating results, the ED a few days ago widened the scope of its money-laundering investigation into the jumbo Covid centres scam and brought the BMC’s entire ₹4,000-crore expenditure on pandemic-related contracts under its scanner.