MSC Bank fraud: EOW files FIR against then Dy CM

The FIR is based on a complaint by activist Surinder Mohan Arora, a 64-year-old Andheri resident, who had filed a public interest litigation (PIL) in the HC, alleging police inaction into the fraud which came to light in 2011.

The economic offences wing (EOW) of the Mumbai police on Monday registered a first information report (FIR) into the alleged multi-crore Maharashtra State Cooperative (MSC) Bank fraud, with the then deputy chief minister, directors and senior members of the bank, officials of district central co-operative banks across Maharashtra and sugar co-operatives that got the loans as the 76 accused.

The development comes after the Bombay high court’s (HC) last week directives to the EOW to begin a probe within five days. (Representative image)

The FIR, a copy of which is with HT, does not mention the names of the accused. The development comes after the Bombay high court’s (HC) last week directives to the EOW to begin a probe within five days.

The FIR is based on a complaint by activist Surinder Mohan Arora, a 64-year-old Andheri resident, who had filed a public interest litigation (PIL) in the HC, alleging police inaction into the fraud which came to light in 2011. While the complainant has claimed the worth of the scam is ₹25,000 crore, the value is yet to be ascertained.

The Maharashtra State Co-operative Bank, the apex bank that controlled credit to the co-operative sector in the state and was handled by then ruling politicians, landed in trouble in 2011, after an inquiry report by the National Bank of Agriculture and Development (Nabard) found the bank was in red, with a negative worth of ₹144 crore.

The report indicted the board of directors of the bank for financial mismanagement that led to ballooning of non-performing assets. This was largely due to handing out of loans to sugar co-operatives and spinning mills in violation of all norms.

The report said balance sheets had been fudged to show a profit of ₹2 crore, when the bank was facing losses of ₹798 crore. The board had 76 directors, of which 44 were elected – 25 from the NCP, 14 from the Congress, 2 each from BJP and PWP and one from the Shiv Sena.

Arora filed his complaint on the basis of the Nabard report and reports of inquiry under provisions of the Maharashtra Co-operative Societies Act, 1960. The EOW has registered a case under sections 406, 409, 420, 465, 467, 468, 471, 120B and 34 of Indian Penal Code, 13 (a)(b)(c) of Prevention of Corruption Act and section 29 of SARFAESI Act.

Satish Talekar, Arora’s lawyer, said, “The complaint is being treated as an FIR. I hope that an independent investigation will be carried out and leniency will not be shown to the accused persons.”