The bank was run by elected members of the board, made up largely from the NCP and Congress politicians
One of the lasting images ahead of the 2014 state polls was that of then Bharatiya Janata Party (BJP) leaders Devendra Fadnavis and Vinod Tawde carrying over 14,000 pages of irrigation scam papers in a bullock cart to hand it over to the Madhav Chitale probe panel. Five years down the line, no action has been taken against then accused former water resources ministers Ajit Pawar and Sunil Tatkare in the multi-crore irrigation scam.
Ahead of the state polls in October, the political temperature in the state has similarly been notched up with the Enforcement Directorate (ED) filing a money laundering case against Nationalist Congress Party (NCP) chief Sharad Pawar in the Maharashtra State Co-operative Bank scam.
The irony is that the MSCB scam, dates back to the Congress-NCP government in 2011 and the inter-rivalry between these parties, much like the irrigation scam.
The first such money laundering case against Pawar, who controlled the Maharashtra’s sugar lobby for over two decades, just ahead of the polls, has, however, put a question mark on the motive of the probe.
This is also because Pawar was not on the board of the MSC Bank as a director during the entire period that the scam refers to (from 2002 to 2017) and as such cannot be held directly responsible for any its decisions.
Doling out loans to sugar co-operative mills, spinning mills controlled by them and their colleagues, in violation of all financial prudence and banking norms and then selling several of these sick mills to themselves or their kin and other politicians makes for the crux of this scam.
Several of the beneficiaries of the sale of as many as 47 sick sugar mills, which were sold along with their surrounding land, for nominal costs include top Congress, NCP and BJP politicians. Several of these mills once they were privatized started making profits.
“The valuation of this scam is much more than ? 25,000 crore as hundreds of acres of land was also sold along with these sick mills in the auctions. The auctions were rigged to benefit leading politicians,” said activist Anjali Damania.
She also said she hoped the ED investigated the case seriously and it did not end up as just noise before the Assembly polls.
The MSC bank scam started unraveling in 2011 after the Reserve Bank of India dissolved the board following an inquiry report by Nabard and a statutory audit report that revealed the gross mismanagement at the bank. This was followed by the state co-operatives department probe in the scam in 2013 under which even a charge sheet was filed under section 88 of the Maharashtra Co-operatives Act, 1960.
But the ED action comes on the heels of the Economic Offences wing case, filed on the basis of a PIL filed in 2012 by an Andheri-based activist, Surinder Arora.
A majority of the bank directors of MSC bank were from the NCP
Arora’s petition points to collusion between the board of directors of the district co-operative banks, sugar co-operatives and the MSC bank and state government. “There is substantial evidence to show how politicians led by NCP, but including those from all parties, cheated and defrauded the state’s co-operative banks, sugar factories. My PIL alleges Pawar was the mastermind of this criminal conspiracy as he indirectly controlled the bank for these two decades,” said Arora, the petitioner.
“His nephew Ajit was the director of the bank, on the loan committee as well as beneficiary of the sale of the factories. ED probe should reveal a clear nexus as well as a money trail,” he said.
The NCP has however termed the entire scam political vendetta. “This has been done to defame NCP and Congress. The bank directors extended loans to sugar co-operatives and 95-98% of these loans have been repaid. The bank was set up to assist the co-operatives sector. These directors were not handing out loans to private mills, but to co-operatives which were jointly owned by farmers. Where is quid pro quo or corruption in this,” asked NCP state chief Jayant Patil.
Does the ED have any material evidence against Pawar to have filed a money laundering case against him? There is no clarity on this. However, Pawar did not enjoy any position on the MSC bank through 2002 to 2017. He cannot be held responsible for acts of commission and omission while handing out bad loans, unless there is evidence or witness against him. The case made by the petitioner is that of criminal abetment and conspiracy. The ED has filed a case under the Prevention of Money Laundering case and as such it will have to show a money trail that shows that actions taken to hand over loans or sell sugar mills directly benefitted him.
Pawar, in a press conference, questioned the timing of the probe just ahead of the elections. “Elections have already been declared. People are smart enough to understand the timing of the action against me. The possibility of vendetta politics cannot be denied,” he said.
The BJP has also several questions to answer if this probe goes ahead. At least three of their senior state leaders had purchased these sugar mills at throwaway prices thus benefiting from the auction. And, several of the Opposition leaders who have joined the party ahead of the polls were directors on the board of the MSC Bank, including Vijaysinh Mohite Patil, Dilip Sopal. Sena’s Anandrao Adsul was also on the board of the bank
In short, the scam refers to mismanagement of the apex co-operative bank of Maharashtra, which controlled credit to the entire co-operative network, including 31 district co-operative banks, primary co-operative societies
- ABOUT THE AUTHOR
Ketaki Ghoge is an associate editor with Hindustan Times. Based in Mumbai, she covers politics and governance in Maharashtra. Journalist for the last 13 years, Ketaki enjoys dicing government policies, administration and analysing politics of the day. . view detail