ED arrests former Pune ZP chairman in ₹494cr bank fraud case

He was produced before a Mumbai special court on Wednesday and remanded in ED’s custody till August 29

MUMBAI: Former chairman of Pune zilla parishad Mangaldas Bandal has been arrested by the Enforcement Directorate (ED) in connection with an alleged ₹494-crore fraud at Pune’s Shivajirao Bhosale Sahakari Bank. He was produced before a Mumbai special court on Wednesday and remanded in ED’s custody till August 29.

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According to the ED, Bandal had used land belonging to local farmers and villagers as mortgage to obtain loans. The value of the mortgaged lands was significantly inflated compared to the market value, said the agency, though Bandal’s lawyers denied the allegations.

Earlier on Tuesday, the ED seized cash worth ₹25 lakh and froze fixed deposits worth ₹50 lakh during searches conducted at Bandal’s premises.

The ED had initiated its investigation in the case under provisions of the Prevention of Money Laundering Act (PMLA), based on a first information report (FIR) registered by Pune’s Shivajinagar police station in 2020. The FIR was based on a complaint filed by the statutory auditor of Shivajirao Bhosale Sahakari Bank.

ED’s investigation revealed that several persons had committed the fraud through a range of irregularities, including siphoning off cash from the bank without any official entry/ record in the core banking system and transferring funds to their own or related parties’ accounts. The accused were also involved in fraudulent disbursal and diversion of loan funds by “key managerial persons” of the bank and by a few others, said sources.

“The ED probe revealed that bogus cheque-discounting facilities were carried out to reduce the bank’s non-performing assets,” said an ED official. “Key managerial persons of the bank treated the bank and its funds as their family concern and utilised the siphoned funds for their personal gains.”

The ED had during searches conducted in February last year provisionally attached 23 properties worth ₹26.60 crore belonging to persons under the scanner in the case including Anil Bhosale, Suryaji Jadhav, Nusrat Mujawar and Anil Bhosale. Equity holdings worth ₹1.06 crore in Bhosale’s demat account was also seized during the searches. The ED’s probe had revealed that Bhosale, Jadhav and Late Shanur Akbar Mujawar were the major beneficiaries of the fraud.