MUMBAI: Shiv Sena MP Bhavana Gawali criminally conspired to convert a trust into a private company through her aide Saeed Khan by "forgery and fraud" for layering of funds worth around Rs 18 crore, the Enforcement Directorate (ED) told a special court here on Tuesday.
The investigation so far suggested that misappropriation of funds of Rs 18.18 crore and theft of Rs 7 crore (cash) are layered, the probe agency told the court during the remand hearing of Khan, who was arrested earlier in the day.
Khan's arrest pertains to a case of money laundering related to alleged financial irregularities in certain trusts linked to Gawali, the MP from the Yavatmal-Washim Lok Sabha seat in Maharashtra.
Khan was remanded to the ED custody till October 1.
Special judge MG Deshpande said that prima facie the grounds (mentioned in remand) indicated the involvement of the accused in money laundering.
The probe agency told the court that the trust, Mahila Utkarsha Pratishthan, filed for conversion into a Section 8 company by alleged fraudulent forgery of signatures of the management and documents from public institutions.
The total assets of Rs 69 crore in the book value (of the trust) were transferred to the newly formed Section 8 company limited, the agency said.
The Companies Act defines a Section 8 company as the one whose objective is to promote fields of arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection, or other similar objectives.
The directors of this company are Khan and Shalinitai Gawali, the mother of the MP.
Bhavana Gawali, along with the two, is a member of this company.
"It is stated that Bhavana Gawali, through her aide Saeed Khan Shergul Khan and his accomplices have criminally conspired to convert the Trust 'Mahila Utkarsha Pratishthan' into a Section 8 company through forgery and fraud for the purpose of layering the trust fund," the ED said.
The initial investigations revealed that there is a huge cash deposit and the withdrawal of bigger amounts from the account of the trust maintained at the Risod Urban cooperative society.
Then branch manager of Risod Urban cooperative society in his statement stated that the society was not entitled to receive a cash deposit of more than Rs 3,00,000.
However, there are multiple cash deposits of much bigger amounts followed by the withdrawal of the same amount on the same day.
He (the manager) also stated that these transactions were merely the book entries and no physical cash was moved.
This was all done on specific instructions of Bhavana Gawali, the ED said.
Thus, it has come to light that the complaints alleging misappropriation of funds of Rs 18.
18 crore and theft of Rs 7 crore (cash) are layered, the probe agency said.
Advocate Hiten Venegokar, appearing for the ED, said Khan had played an active role in forging documents and creating companies.
The entire transactions and further layering of properties of the trust needed to be probed and it won't be possible without the custody of the accused, he told the court.
Sajal Yadav, appearing for Khan, opposed the remand plea of the ED, saying no PMLA (Prevention of Money Laundering Act) case was made out against his client.
"Let them show if any money has come to my account. There is nothing against me. I'm targeted because I'm affiliated to a state party," Khan said through his lawyer.
The ED case is based on an FIR registered at Risod police station in the Washim district for cheating and criminal breach of trust.
Arguing on the point of jurisdiction, Yadav said, "The Taliban is killing people that doesn't mean an ECIR will be registered here. You (ED) need to follow jurisdiction".
Special judge MG Deshpande, however, said prima facie the grounds (mentioned in remand) indicated the involvement of the accused in money laundering.
Considering the compass of enquiry and facts of the case, sufficient opportunity needs to be given to the ED, he said and remanded Khan to the custody of ED.
The agency had last month conducted searches at multiple premises in Yavatmal, Washim and Mumbai in this case.
The ED case is based on a Maharashtra police FIR against some accused related to an Rs 18 alleged crore fraud and some linked irregularities.