Mumbai Police’s EOW files closure report in alleged ₹25,000-crore MSC Bank scam, says it’s civil in nature

The economic offences wing (EOW) of the Mumbai Police filed a closure report in the alleged ₹25,000-crore Maharashtra State Co-operative (MSC) Bank fraud. The police

The economic offences wing (EOW) of the Mumbai Police filed a closure report in the alleged ₹25,000-crore Maharashtra State Co-operative (MSC) Bank fraud. The police filed a C summary in the special anti-corruption bureau (ACB) court after EOW’s special investigation team (SIT) found no criminal aspect to be investigated in the case.

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The police complaint named 76 people accused in the case including the then deputy chief minister and many other political bigwigs from the state.

An EOW source close to the development on Tuesday said the SIT had, on September 15, filed a C summary report in the MSC Bank scam at the special ACB court. C summary is filed when the complaint is neither true nor false or if the offence is of civil nature.

The investigation officer of the case and assistant commissioner of police (ACP), EOW, Kiran Patil, has confirmed that a C summary report was filed in the case last month, but refused to elaborate as he is not authorised to speak to the media.

An EOW officer, who is aware of the development, requesting anonymity said that the investigation has revealed that all the transactions in the alleged scam were done as per the rules prescribed by the government and National Bank for Agriculture and Rural Development (Nabard). There are certain irregularities, but they are of civil nature and no criminal investigation is required for the same, he said.

EOW had filed a first information report (FIR) in the case under sections 406, 409, 420, 465, 467, 468, 471, 120B and 34 of the Indian Penal Code, section 13 (a)(b)(c) of the Prevention of Corruption Act and section 29 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. The case was filed in August last year on the direction of the Bombay high court, which was hearing a public interest litigation (PIL) filed by Andheri-based social activist Surinder Arora, 64, who had alleged police inaction into the fraud.

The complaint pertained to thousands of crores obtained in loans by sugar cooperatives, spinning mills and other processing units from district and cooperative banks.

MSC 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 Nabard found the bank was in red with a negative 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 complainant Arora had then alleged that illegal loans were sanctioned and secured assets were sold out at throwaway prices, contrary to norms.

The Nabard report had said that 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 whom 44 were elected representatives — 25 from the Nationalist Congress Party, 14 from the Congress, 2 each from the Bharatiya Janata Party and Peasants and Workers Party of India and one from the Shiv Sena.

EOW was already making a preliminary inquiry in the matter but before it could conclude anything, a PIL was filed in this connection in the high court.

Senior EOW officers were not available for comment on the development.

Advocate Satish Talekar, Arora’s lawyer, said, “EOW filed a 67,600-page closure report in the case last month. However, the court has not accepted it yet as the complainant is yet to be heard by the court. We would soon file our say opposing the closure report. And if the court accepts police’s closure report, then we are going to challenge it in a higher court.”

Talekar said, “The investigation officer did not go to any sugar factory, did not record statements of people having key importance in the case. It’s all manipulated. We would soon be filing another PIL seeking investigation by Central Bureau of Investigation (CBI).”

After EOW filed an FIR in August 2019, the Enforcement Directorate (ED) also registered a case of suspected money laundering and initiated a parallel probe. A senior official from ED confirmed to HT that ED had, on Monday, opposed the clean chit given to the politicians named in the multicore scam.