ED questions Rohit Pawar for 8 hours in MSC Bank scam

The MLA’s questioning by the ED is in a case related to the alleged rigged auction of an Aurangabad-based sick sugar mill in 2012 and suspected diversion of bank funds by Baramati Agro Private Limited (BAPL) and two other firms

MUMBAI: The Enforcement Directorate (ED) on Thursday questioned NCP legislator and party chief Sharad Pawar’s grandnephew Rohit Pawar for over eight hours in the money-laundering probe related to alleged irregularities in the sale of mortgaged cooperative sugar factories by the Maharashtra State Cooperative Bank (MSCB). Rohit, who was questioned by the agency last Wednesday as well, on Thursday reached the ED’s office in Ballard Pier at around 1.00 pm and left the office after questioning ended at around 9.00 pm.

NCP MLA Rohit Pawar arrives at the Directorate of Enforcement (ED) office in Ballard Pier on Thursday. (Bhushan Koyande/HT Photo)

The MLA’s questioning by the ED is in a case related to the alleged rigged auction of an Aurangabad-based sick sugar mill in 2012 and suspected diversion of bank funds by Baramati Agro Private Limited (BAPL) and two other firms. Rohit, who represents the Karjat-Jamkhed assembly constituency, is the chief executive officer of BAPL.

BAPL is accused of funding an accused co-bidder for complying with the requirement of submitting an Earnest Money Deposit (EMD) of ₹5 crore to participate in the auction, according to the ED officials.

According to the ED, BAPL, along with the now-defunct Hitech Engineering Corporation India Pvt Ltd and Samruddhi Sugar Pvt Ltd, had participated in the auction of the Aurangabad-based cooperative sugar factory, Kannad SSK, in October-November 2012. Kannad SSK was eventually purchased by BAPL allegedly for around ₹50 crore.

“The ED is also investigating whether BAPL used funds that were part of cash credit accounts of various banks sanctioned for the purpose of working capital requirements to purchase the sugar mill,” an agency source said. The ED probe is based on an FIR registered by the Mumbai police’s Economic Offences Wing (EOW) on August 26, 2019.

According to the ED, Hitech Engineering had allegedly received an amount of ₹5 crore from Baramati Agro, which it used days later as an EMD to participate in the auction of Kannad SSK. Kannad SSK, which had taken loans from the MSCB, was auctioned by the bank under the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act.

The EOW’s case was registered in pursuance of an August 22, 2019 order of the Bombay high court. The EOW had filed a closure report in the competent court in its probe, which is pending.

The FIR alleged that sick sugar mills were fraudulently sold by the then officials and directors of MSCB at throwaway prices to their relatives/private citizens without following the due procedure prescribed under the SARFAESI Act.

Meanwhile, the EOW last month filed a closure report—its second one since September 2020—in a city court in the alleged ₹25,000-crore MSCB scam case. The agency, while filing the closure report on January 20, said that nothing incriminating was found during its second probe despite examining the points raised by the petitioners. Responding to the EOW’s closure report, an ED officer said that the report had not yet come to the agency, but once it did, the agency would look at it to decide further steps. Sources said that the ED probe is also verifying allegations that the auctioned sugar mill was undervalued.