NEW DELHI: The Enforcement Directorate (ED) on Friday attached over 200 acres of land and other assets worth a total Rs 78.38 crore of a Jalna-based sugar mill linked to Shiv Sena leader and former party MLA Arjun Khotkar in connection with the alleged Maharashtra State Cooperative Bank (MSCB) scam-linked money laundering probe.
Apart from the land, plant, machinery and building belonging to the Jalna Sahakari Sakhar Karkhana (SSK) Ltd. located at Sawargaon Hadap village in the said district have been attached after the agency issued a provisional order under the Prevention of Money Laundering Act (PMLA), the Enforcement Directorate said in a statement.
The assets of Jalna SSK are "currently held in the name of Arjun Sugar Industries Pvt. Ltd. , a company incorporated by Arjun Khotkar and others on May 8, 2012 only with a view to purchase the Jalna SSK Ltd", the federal probe agency said.
Sixty-year-old Khotkar has been a Shiv Sena party MLA from Jalna and has also served as a minister in the Maharashtra government.
He is considered close to party supremo and Maharashtra Chief Minister Uddhav Thackeray who is currently battling a political crisis caused by rebellious MLAs of his party which is in power in the state along with the NCP and Congress.
The ED last year had similarly attached assets worth Rs 65 crore of a Satara-based sugar mill in the MSCB scam case and had said that a company linked to state deputy chief minister and NCP leader Ajit Pawar and his wife were involved in the case.
The MSCB money laundering case stems from a August, 2019 FIR of the Mumbai Police's Economic Offences Wing.
The police complaint came after the Bombay High Court issued an order on August 22 that year to investigate the allegations of selling sugar factories in the Maharashtra cooperative sector through alleged fraudulent means and also that they were sold at throw-away prices.
The ED probe found that the "fraudulent mode and manner in which the bidding process was followed for sale of SSK and subsequent distribution of assets of SSK among family-based business entities of the members of the MSCB indicates sale of SSK".
"Hence, the properties of the said SSK which includes government land of 100 acre, plant and machinery, building, structure which was acquired illegally (now owned by Arjun Sugar Industries Pvt. Ltd) are proceeds of crime," he said.
The agency said that the sugar mill "remained closed" since its sale. It was established during 1984-85 on about 235 acres of land that included 100 acres received without any monetary consideration from the Maharashtra government.
"The Jalna SSK failed to repay the loan availed from MSCB and was declared NPA (non performing asset) on 31.03.2002. There was a loan outstanding of Rs 33.49 crore of MSCB on Jalna SSK as on 30.09.2008. To recover its dues, MSCB took possession of the said SSK on 16.02.2009 under the SARFAESI Act," he said.
"Thereafter, MSCB conducted an auction of this mill on February 27, 2012 with a reserve price of Rs 42.18 crore and only two parties, Tapadia Constructions Pvt. Ltd., Aurangabad and Ajeet Seeds Pvt. Ltd, Aurangabad participated in the said auction," the ED said.
Tapadia Constructions, according to the ED, was the highest bidder who bid for Rs 42.31 crore whereas the second company bid below the reserve price. "Investigation found that the buyers of bid documents and final participants in the auction were linked to each other and Tapadia Constructions Pvt. Ltd and Ajeet Seeds Pvt. Ltd are operating from the same building in Jalna," it said.
The ED said that after receipt of final installment of sale amount by MSCB, sale certificate was issued to Tapadia Construction Pvt. Ltd. on the same day (03.12.2012) but the company did not operate the SSK and after a lapse of 15 months, the mill along with 235 acres of land "was said to be sold" to Arjun Sugar Industries Pvt.Ltd.
It said Khotkar was on the board of directors of MSCB during the period from 1998-2004 and was director in the Jalna SSK during 1997-2003. He is also an elected chairman of the Jalna APMC (agriculture produce market committee) since 2007.
Probe found that around Rs 10.56 crore paid by Tapadia Construction Pvt. Ltd. to MSCB as initial deposit in lieu of Jalna SSK was an "adjustment entity" introduced by conversion of cash through "shell" (paper) companies and Rs 31.73 crore was sourced from Arjun Sugar Industries Pvt. Ltd.
"Thus, Tapadia Constructions Pvt. Ltd was only a proxy entity which had purchased Jalna SSK Ltd from MSCB as a proxy for others," the ED alleged. The agency said the sugar mill was sold on a "suppressed" amount of Rs 42.31 crore whereas the valuation of assets conducted by independent (government approved) valuer appointed by ED revealed that the value of Jalna SSK was around Rs 78 crore at the material time.
The valuer submitted its report on January 20 this year to the ED giving a breakup of the total Rs 78 crore valuation saying the immovable assets of the mills were worth Rs 48.38 crore while the movable assets were valued at Rs 30 crore for the year 2012.
"The valuable crucial equipment of the SSK such as boilers were sold as scrap by Arjun Sugar Industries Pvt. Ltd," it said.