ED’s Pawar probe banks on 2010 Nabard report

A 2011 chargesheet, an audit report and complainant’s statement too could be used by agency to ascertain involvement of Sharad Pawar.

Have no problem if I'm sent to jail: Sharad Pawar on ED's FIR in MSCB scam
MUMBAI: The Enforcement Directorate could confront Sharad Pawar with a 2010 report into the functioning of the Maharashtra State Cooperative (MSC) Bank and a complainant’s statement over alleged financial irregularities at the lender, even as the Nationalist Congress Party leader said he would go to the probe agency on Friday and “not bow down before Delhi rulers.”

Official sources told ET that the National Bank for Agriculture and Rural Development (Nabard) inspection report, a 2011 chargesheet under the Maharashtra Cooperative Societies Act, an audit report by Joshi and Naik Associates, and a statement by the main complainant before the Mumbai Police could be used by the agency to ascertain the involvement of Pawar in the alleged irregularities at the cooperative bank.

His nephew and former Maharashtra deputy chief minister Ajit Pawar is also under the scrutiny besides about 70 others.

To be sure, none of these documents, barring the supplementary statement to the Mumbai police by complainant Surinder Arora, mentions Sharad Pawar.

The probe agency, during the course of its investigations, is likely to confront those named in the Enforcement Case Information Report (ECIR), including the Pawars.

Others under the lens are former directors and office bearers at the MSC Bank between 2001 and 2017. There are allegations that loan irregularities alone at the cooperative bank between 2007 and 2011 amounted to Rs 297 crore.

In his recent supplementary statement before the Mumbai Police, complainant Arora has claimed that the “scam couldn’t have happened without the ‘tutorial’ of Sharad Pawar,” said a senior official aware of the contents of the statement.

“Since the statement is part of the FIR the ED is relying upon, the role of Sharad Pawar will also be looked into.”

Both Sharad Pawar and his nephew Ajit Pawar are named in the ECIR filed on Monday. With Maharashtra going to polls in less than a month, the Opposition called the probe ‘political witch-hunt’.

Earlier in the day, Sharad Pawar told reporters that he will present himself before the directorate on Friday. Ajit Pawar didn’t respond to ET’s queries.

Allegations against Ajit Pawar pertain to loans sanctioned by MSC Bank, which advanced large sums without securing any charge against the advances, and often at interest rates that were highly subsidised.

“The loans were restructured solely because some of the directors had personal interest,” said the FIR filed with Mumbai police. “The loan committee sanctioned loans to (district sugar cooperatives) having negative net worth and accumulated losses… in violation of the Credit Monitoring Arrangement of Nabard…causing a loss of Rs 297.14 crore to the bank.”

The directorate is relying on this FIR for investigating the accused under provisions of the Prevention of Money Laundering Act (PMLA).


The other major allegation against Ajit Pawar and others pertains to the sale of cooperative sugar factories (CSF), which were allegedly sold below the reserve prices to ‘near and dear ones’, said the 2011 chargesheet.

“Gross irregularities committed by the bank while selling the secured assets below the offset price in respect of six sugar factories caused a loss to the extent of Rs 87 crore,” said the charge-sheet.

It also said that the loans were disbursed to these six sugar factories without securing repayments and for which 75 people, including the bank’s directors at that time, were responsible.

“The executive committee of the bank, consisting of Ajit Pawar and others, decided to sell off the properties of Akola Zilla SSK for Rs 17.10 crore, much below the reserve price of Rs 25.16 crore, as well as Kondeshwar SSK at Rs 14.01crore against the reserve price of Rs 17.10 crore in its meeting held on December 30, 2009, only with a dishonest intention to (help) wrongful purchasers who had personal or political nexus with the board of directors,” according to the 2011 charge-sheet.

The Nabard report also points to other anomalies.

The bank gave loans/credit limits “without obtaining credit authorisation from Nabard for financing of Infrastructure Projects and credit limits to Cotton Marketing Federations; sold properties of borrowing units acquired under SARFAESI Act, 2002, below the reserve price; distributed incentives to co-operative societies/bank toward centenary year celebrations despite the fact that the bank had not declared a dividend for the past several years; sanctioned loan/ additional loans contrary to recommendations, and extended the due date of repayments to conceal NPAs.”
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