Mumbai court sends Shiv Sena MLA’s close associate to judicial custody till Dec 9 in money laundering case

A city court remanded Amit Chandole, a business associate of Shiv Sena Member of Legislative Assembly (MLA) Pratap Sarnaik, in judicial custody till December 9 on Sunday.

Chandole was arrested on Wednesday by the Enforcement Directorate (ED) in a money laundering case related to security services giant Topsgrup – owned by Rahul Nanda. After the completion of his three-day custody, ED officials produced him before the holiday court. However, the court did not agree to ED’s extension of Chandole’s custody and instead sent him to judicial custody. The counsel for the central agency has confirmed the development.

ED had in its previous remand application alleged that Topsgrup had obtained a contract for providing security guards for the Mumbai Metropolitan Region Development Authority (MMRDA) projects in collusion with Pratap Sarnaik through illegal means by a “well-thought out strategy”. The agency has claimed that the aim of these illegal manoeuvres was to get additional inadmissible benefit by inflating the number of contracted security guards deployed at the cost of MMRDA and illegal cash gratification to Sarnaik for facilitating this scam.

Against this “active role and criminal conspiracy”, Sarnaik used to get 50% profit earned out of the said contract and sometimes, the money used to be transferred to the account of a third person, said ED. Chandole accepted the receipt of cash from Topsgrup for the MMRDA projects, ED claimed. Therefore, part of the amount received by Topsgrup from MMRDA appears to be proceeds of crime, said ED.

The Sena leader had termed ED’s actions as an outcome of vendetta politics.

“The day I moved a privilege motion against (actor) Kangana Ranaut and (Republic TV editor-in-chief) Arnab Goswami, and spoke about reopening the Anvay Naik (suicide) case (in which Goswami is an accused), I knew what would happen. I am a Shiv Sainik and a fighter who has reached this far. (Chief minister) Uddhavsaheb Thackeray has made me the spokesperson to put forward the party’s views. Today they [ED officers] told him [Vihang] your father speaks a lot on Ranaut and Goswami. I will continue to speak wherever Mumbai, Maharashtra or its police are maligned. I have done nothing wrong in my business,” he has said last week after ED raided his properties and questioned his son.

Sarnaik on November 25 quarantined himself citing Covid-19 guidelines after returning to the state from Goa. He has asked ED for a week’s time to join the investigation. The agency said others people linked to Sarnaik’s businesses would also be soon asked to join the probe.

Earlier, Nanda had also denied all the allegations. “Pratap is a very old friend and has not invested a single penny in my business or company ever. He or Sena have nothing to do with Tops. This is absolutely absurd,” he said.

ED’s money laundering probe is based on a first information report (FIR) registered by Mumbai’s Yellow Gate police on October 28 on the direction of 16th metropolitan magistrate court against Nanda and his family members. The case was recently transferred to the Mumbai Police economic offences wing (EOW) for further investigation.

The complainant filed by Ramesh lyer, the former chairman of Topsgrup, alleged that Nanda and others diverted huge funds from the firm’s accounts to various accounts in India and overseas. He further alleged that these funds were utilised by Nanda and others for their personal purposes such as purchasing property. The security firm was thus defrauded of Rs175 crore.

Iyer and Topsgrup’s former director of finance Amar Panghal, in their statements, said that in 2014, a contract was signed by Topsgrup Services & Solutions Ltd with MMRDA, according to which 350-500 guards had to be deployed at project sites on a monthly basis. While only 70% of the guards were actually deployed, the firm billed MMRDA for all the guards and charged the authority for their salaries and provident fund, ED stated before the court.

The duo reportedly informed ED that huge cash amounts were withdrawn from the bank accounts of Topsgrup Services & Solutions Ltd and given to a former top executive. In financial year 2017-18, an amount of around Rs92 lakh was handed over to the executive and there was an arrangement with two persons, one of whom was Chandole who got a monthly share of profits earned on the MMRDA contracts. In addition, a fixed commission of Rs50,000 per month and Rs500 per guard deployed was being paid to Chandole and the other man by the top executive, said ED.

As per the details provided by lyer, from May 2017 to June this year, the amount aggregating to Rs2.36 crore has been shared as commission. Of the said amount, Rs90 lakh was paid through bank transfers to Chandole and the other man. As per lyer, all these amounts are still being paid from Topsgrup’s bank accounts and a commission of around Rs7 crore has been paid to the duo since 2014 when the contract with MMRDA was initiated.

During the course of investigation, the top executive’s statements were recorded on November 24 and 25, in which he purportedly said that Nanda acquired a United Kingdom (UK)-based firm, Shield Guarding Company Limited, in 2014 for around Rs200-250 crore. On the pretext of meeting the expenses of overseas company, Nanda used to allegedly siphon off money from the Indian company for his and his family’s personal expenses, including buying several immovable properties in Dubai and the UK.