Ajit Pawar, wife Sunetra, nephew Rohit get clean chits in MSC Bank fraud case

EOW's closure report on MSC Bank fraud case finds no cognizable offense, denies wrongdoing in selling sugar factory, and dismisses allegations against Pawars.

In its second closure report filed in the purported multi-crore fraud at the Maharashtra State Co-operative (MSC) Bank, the Economic Offences Wing (EOW) of the Mumbai police has stated that the information received and the statements recorded by it did not reveal commission of any cognisable offence. Interestingly, the EOW has also not found anything incriminating in the material supplied to it by the Enforcement Directorate (ED) regarding purchase of a cooperative sugar factory by Rohit Pawar’s Baramati Agro.

Ajit Pawar (HT/File)

Another issue raised during the investigation pertained to the selling of Jarandeshwar Sugar Factory to Guru Commodity Pvt Ltd by MSC Bank for ₹65 crore, which was allegedly much less than the actual market price. It was alleged that Guru Commodity immediately rented the factory to Jarandeshwar Sugar Mill Limited at ₹12 lakh per annum, which, in turn, received funds worth ₹20 crore from M/s Jay Agrotech Pvt Ltd. Deputy chief minister Ajit Pawar’s uncle Rajendra Ghadge was the then director of Jarandeshwar Sugar Mill Limited and Ajit’s wife, Sunetra Pawar, was the director of M/s Jay Agrotech Private limited.

The MSC Bank case arose out of a Public Interest Litigation (PIL) petition filed by Andheri-based social activist Surinder Arora, 64, who alleged police inaction in the fraud pertaining to thousands of crores obtained in loans by sugar cooperatives, spinning mills and other processing units from district and cooperative banks.

The report indicted the board of directors of the bank for financial mismanagement that led to the ballooning of non-performing assets. This was largely due to handing out loans to sugar co-operatives and spinning mills in violation of all norms. The complainant Arora had then alleged that illegal loans were sanctioned and secured assets were sold at throwaway prices.

The EOW filed its first closure report in September 2020, which was accepted by the court. In October 2022, the probe agency informed the special court dealing with cases against MPs/MLAs that it was conducting a further investigation into the matter based on points raised by the protest petitioners (complainants) and the ED.

However, a year and a half later, in its report, the EOW stated that the investigation conducted based on the information provided by the ED, the statements recorded, and the documents obtained because of the points in the protest petition, no unfair loss or any cognisable offence committed by anyone was revealed.

“In the report submitted by retired district judge Panditrao Bapurao Jadhav under Section 88 of the Maharashtra Co-operative Societies Act, 1960, it has been concluded that the bank (MSCB) has not suffered any unfair loss due to the loans given to the factories and that the bank is recovering the amount due from the factories through legal means. The authorised officer has also mentioned in his report that the bank has not committed any wrongdoing,” the closure report stated, adding that in the comprehensive investigation of the said crime, it was found that the accused did not commit any cognisable offence.

It was earlier alleged that Baramati Agro Limited, then managed by Rajendra Pawar and his son Rohit Pawar, bought Kannada Cooperative Sugar Factory, despite not having the financial capacity to do so and hence, the amount used by this company was sanctioned by different banks under working capital facility in different accounts. However, these were diverted and used to purchase Kannada Sugar Factory.

The closure report denied all the allegations and instead stated that in 2011, the MSCB board of directors was dissolved, and an administrator was appointed in its place, ensuring that all the bank affairs thereafter were conducted through the administrative officer appointed by the government.

“The sale of the factory was done during the administration period and in accordance with the SARFAESI Act. No evidence was found regarding the involvement of directors in the sale of the factory to the relatives of the directors of the bank,” the report submitted, adding that Baramati Agro Limited had enough funds to buy the said factory.

Asserting that the investigation revealed that no crime was committed, the report submitted that all the due processes were followed and a total of thirteen tenders were received.