There are allegations that MSC Bank had fraudulently sanctioned loans to the office bearers of cooperative sugar factories and also the bank's then top execs. The scam is pegged at Rs 25,000 crore.
The Enforcement Directorate (ED) has registered an Enforcement Case Information Report (ECIR) in connection with the Maharashtra State Co-operative (MSC) Bank fraud case against Nationalist Congress Party (NCP) chief Sharad Pawar, his nephew and former deputy chief minister Ajit Pawar and 70 other officials of MSC Bank.
It is alleged that MSC Bank had sanctioned loans in a fraudulent manner to office bearers and directors of local co-operative sugar factories (CSFs), spinning mills and other processing units, and also to the bank's then top executives. The scam is pegged at Rs 25,000 crore.
Most of the 48 directors of the MSC Bank at the time when the alleged fraud was committed between 2001 and 2011 were elected representatives from various parties.
Some of the directors were Ajit Pawar, Anand Adsul and Dilip Deshmukh, among others. The agency has also named Isharlal Jain, Jayant Patil, Shivaji Rao Nalvade, Rajendra Shingane and Madan Patil.
The ED will be probing the alleged money-laundering in the case. Sources stated that loans were provided to CSFs by the officials of the MSC Bank who were allegedly connected to the owners. The loans sanctioned is suspected to have been done only to extend benefits to the directors of the lending bank for personal gains thereby defrauding and cheating the bank and its shareholders.
The agency will probe allegations of loans sanctioned to CSFs despite their weak financials and negative net worth with no collateral in many cases.
Subsequently, the CSFs -- that turned sick due to alleged mismanagement and underutilisation of capacity -- were sold by the board at a price much below the reserve price offering wrongful gains to the purchaser.The agency will probe why the CSFs were sold for much lower than the reserve price, and in some cases, at a price favouring the purchaser with no rules followed to fix the reserve price. The probe will also cover allegations of forged documents like sale certificates made in some instances in which the actual sale was done at a much lower level than specified.