MSC Bank probe: ED chargesheet names ex-ministers Prajakt Tanpure, Ranjit Deshmukh, Arjun Khotkar

The Enforcement Directorate (ED) has filed two supplementary chargesheets in a money-laundering investigation related to the Maharashtra State Cooperative Bank case. The chargesheets name seven individuals, including a legislator and former state minister, as well as four firms involved in alleged fraudulent sales of cooperative sugar factories.

MUMBAI: Prajakt Tanpure, Nationalist Congress Party (NCP) ‘s legislator and former state minister, his father Prasad Tanpure, Ranjeet Deshmukh, ex-Congress state chief, Arjunrao Panditrao Khotkar, Shiv Sena leader, are among seven individuals against whom the Enforcement Directorate (ED) on Thursday submitted in sessions court two supplementary chargesheets as part of its money-laundering investigation related to Maharashtra State Cooperative (MSC) Bank case.

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The chargesheets are also against four firms in the case related to the alleged fraudulent sale of two co-operative sugar factories by then officials and directors of MSC Bank at throw-away prices in Ahmednagar and Jalna to related entities without following the due procedures.

Others named as accused include Sameer Padmakar Mulay, businessman, Jugal Kishore Tapadia, builder, and Subhash Deshmukh.

The accused firms included in the two chargesheets are Prasad Sugar and Allied Agro Products Limited, Takshashila Securities Private Limited, Arjun Sugar Industries Pvt. Ltd and Tapadia Construction Pvt. Ltd.

The ED’s first supplementary chargesheet that was submitted on August 24 in the case related to alleged irregularities in the sale at throw-away price of an Ahmednagar based cooperative sugar mill, Ram Ganesh Gadkari Sahkari Sakhar Karkhana (SSK).

The ED probe revealed that the MSCB had allegedly undertaken the auction of the Ram Ganesh Gadkari SSK in the year 2007 at undervalued price and without following the due process. The said SSK was sold to Prasad Sugar and Allied Agro Products Ltd, a firm of Prajakt Tanpure for a mere ₹12.95 crore despite the reserve price being of ₹26.32 crore, according to the agency.

The ED probe revealed that even though Prasad Sugar was the alleged sole bidder, in order to project the bid process as competitive, the signature of a ‘second bidder’ was also taken by MSCB officials on the tender documents.

The ‘second bidder’ had allegedly not even deposited the required Earnest Money Deposit (EMD) amount and was suspected to be “a proxy of Prasad Sugar”, according to the agency.

Further, though the auction was conducted in the year of 2007, Prasad Sugar allegedly completed the payment of the sale amount only in 2010 against the statutory condition of completing payment within a period of 52 days at the maximum, according to the agency.

The agency’s money-trail investigation revealed that the funds utilised by Prasad Sugar for the payment was allegedly “majorly received from other parties without any rationale”, according to the ED.

It was also allegedly revealed that part of the funds to purchase the SSK had also come from Ranjit Deshmukh, the former chairman of Ram Ganesh Gadkari SSK (1995-2004), according to the ED.

Prasad Sugar is a family-held entity of Prasad Tanpure, who was allegedly one of the prominent and influential members of the Board of Directors of the MSCB from August 2004 to March 2010.

After taking possession of the entire assets of the SSK, the plant and machinery was allegedly dismantled, transported and installed at a new location in Vambori, Ahmednagar. The land and structure were thereafter allegedly sold to co-accused Takshshila Securities Private Limited in 2011.

The ED had last year provisionally attached assets worth ₹7.6 crore, including the erstwhile SSK’s 90 acres of land held in the name of Takshshila Securities Pvt. Ltd, and two pieces of non-agricultural land admeasuring 4.6 acres belonging to Prajakt.

SECOND SUPPLEMENTARY CHARGESHEET

The ED submitted its second chargesheet on August 25 in the case related to the alleged irregularities in the sale of Jalna Sahakari Sakhar Karkhana (SSK) Ltd. The ED probe had revealed that M/s Jalna SSK Limited was established in the year 1984-85 on around 235 acres of land, including 100 acres of land received without any monetary consideration from the state government.

The Jalna SSK had allegedly failed to repay the loan availed from the MSCB and had been declared as a Non-Performing Asset (NPA) on March 31, 2002, with an outstanding due of ₹33.49 crore as in September 2008.

To recover its dues, MSCB took possession of the SSK on February 16, 2009, under the SARFAESI Act. Thereafter, MSCB conducted the auction of the Jalna SSK on February 27, 2012, with the reserve price of ₹42.18 crore, according to the ED.

Only two parties, Tapadia Constructions Pvt. Ltd, Aurangabad and Ajeet Seeds Pvt. Ltd, Aurangabad had allegedly participated in the said auction, according to ED. Tapadia was the alleged highest bidder, with the bid of ₹42.31 crore, whereas the other bidder, Ajeet Seeds’s bid was below the reserve price.

The ED’s probe also revealed that the buyers of the bid documents and the final participants in the auction were allegedly inter-linked, and that Tapadia Constructions and Ajeet Seeds were then operating from the same building in Jalna.

After receipt of the final installment of sale amount by the MSCB, the sale certificate was also issued to Tapadia Construction on the same day in December 2012.

Tapadia Constructions allegedly did not operate the SSK and after a lapse of 15 months, the SSK along with 235 acres of land located in Jalna was suspected to have been sold to Arjun Sugar Industries Pvt. Ltd. Arjun Sugar was allegedly incorporared by Arjunrao Panditrao Khotkar and others only with a view to purchase the Jalna SSK Ltd in May 2012, according to ED.

ED’s probe revealed that Khotkar was on the Board of Director of MSCB during 1998-2004 and was a director in the Jalna SSK during 1997 to 2003. Further, he was elected as the chairman of the APMC, Jalna in 2007. He was also director of DCCB (District Central Cooperative Bank Ltd) for several years.

The ED’s probe also revealed that around ₹10.56 crore paid by Tapadia Construction Pvt. Ltd. to MSCB as an initial deposit in lieu of Jalna SSK was allegedly an adjustment entity introduced by the conversion of cash through shell companies, according to the agency.

A sum of ₹31.73 crore was sourced allegedly from Arjun Sugar Industries Pvt. Ltd in December 2012. Thus, Tapadia Constructions Pvt. Ltd was allegedly only a proxy entity which purchased Jalna SSK Ltd from MSCB as a proxy for others, according to the ED.

The ED’s probe revealed that Jalna SSK’s was allegedly sold for an amount of ₹42.31 crore by suppressing the value, whereas the valuation of the assets conducted by an independent valuer appointed by the ED revealed that its value was around ₹78 crore at the material time.

The government-approved valuer had submitted his Valuation Report dated January 20, 2022, to the ED evaluating the immovable assets for ₹48.38 crore and the movable assets at ₹30 crore of Jalna SSK in the year 2012.

The investigation also revealed that the valuable and crucial equipments of the SSK such as boiler were allegedly sold by showing them as scrap by Arjun Sugar, the agency said.

The ED also said that the District Collector’s office, to stop the unauthorised sale of the government land to private entity, had initiated action and the Sub-Divisional Officer, Jalna had declared the registry of registry of the government land to Tapadia Construction Pvt Ltd as null and void vide an order dated April 12, 2018.

The investigation revealed the allegedly fraudulent mode and manner in which the bidding process was followed for the sale of the SSK and subsequent distribution of its assets among family-based business entity of the member of MSCB, according to the agency.

The ED had last year attached assets worth ₹78.38 crore of Jalna SSK Ltd, including residual plant and machinery at the site, building structures and more than 200 acres of land.

2019 EOW CASE

The ED’s probe was initiated on the basis of a First Information Report (FIR), dated August 26, 2019, registered by Mumbai police’s Economic Offence Wing (EOW) under various sections of the Indian Penal Code including criminal conspiracy and cheating and the Prevention of Corruption Act.

The EOW’s case was registered in pursuance of an August 22, 2019, order of the Bombay High Court. The EOW FIR had alleged that the SSKs were fraudulently sold by the then officials and directors of MSCB at throw-away prices to their relatives/private persons without following the due procedure prescribed under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.

The EOW had filed a closure report in the competent court in its probe, which is pending.