Mumbai: Triggering a political earthquake ahead of the October 21 Assembly elections in Maharashtra, the Enforcement Directorate (ED) has registered a money laundering case against Nationalist Congress Party (NCP) President Sharad Pawar, his nephew Ajit Pawar, and several other politicians and officials in the Maharashtra State Cooperative Bank (MSCB) scam worth around Rs 25,000 crore, officials said here on Tuesday.
The ED's move against the political bigwigs came after the Bombay HC ordered the Economic Offences Wing (EOW) of the Mumbai Police to probe and file cases against the Pawars and others in the matter, setting the politicians scurrying.
Following the EOW's FIR in late August, the ED filed its case on Tuesday.
Mumbai-based activist Surinder M. Arora had approached the Bombay HC, demanding an investigation into the MSCB scam.
Earlier this month, Ajit Pawar and others had moved the Supreme Court to quash the proceedings in the matter, but Justices Arun Mishra and MR Shah had declined the plea and instead asked the Mumbai Police to conduct a free and fair probe.
The ED said there were several irregularities in loans provided to the cooperative sugar factories (CSFs) by the MSCB officials who were allegedly connected to the owners of the factories.
The loans were sanctioned to the factories despite weak financials, negative net worth, collaterals not taken in many cases and additional facilities extended without any justification.
Besides, the ED said many transactions involved forged sales documents and many sales were effected without inviting tenders, thus flouting rules of the NABARD, RBI and SARFAESI.
"There was huge misappropriation of funds on the part of committee members, directors and loan committee members of MSCB, acting in connivance to siphon off the money and causing huge losses to the bank," said the ED.
Setting the ball rolling last month, a division bench of Bombay HC comprising Justices SC Dharmadhikari and SK Shinde had ruled that there was prima facie credible evidence and directed the EOW to initiate proceedings invoking the relevant provisions of the law.
The Pawars and other prominent politicians, named in a public interest litigation filed by Arora, were accused of causing losses worth around Rs 25,000 crore to the MSCB between 2007 and 2011.
Earlier, a quasi-judicial probe panel under the Maharashtra Cooperative Societies Act had blamed Pawars and the others accused in the matter.
The National Bank for Agriculture & Rural Development (NABARD) had also inspected and audited the MSCB, revealing flouting of various banking and Reserve Bank of India (RBI) rules while distributing loans to sugar factories and spinning mills, and the subsequent defaults on repayments and recoveries of the dues.
Despite the probe reports and complaints lodged by Arora, no action or FIR was filed in the matter after which he filed a PIL in the high court in 2015.
Not the first
There had been several high profile arrests made in the recent weeks, namely that of former Andhra Chief Minister and Telugu Desam Party leader N Chandrababu Naidu and Congress leaders DK Shivakumar and P Chidambaram on various charges. The opposition has charged that the government of carrying out a political vendetta.
(With inputs from IANS)