The alleged fraud was committed between 2001 and 2011 and is pegged at Rs 25,000 crore
On September 24, the Enforcement Directorate (ED) registered a case against Nationalist Congress Party (NCP) chief Sharad Pawar and his nephew Ajit Pawar, among 70 other officials of the Maharashtra State Co-operative (MSC) Bank.
The Enforcement Case Information Report (ECIR), equivalent to a police FIR, was registered in connection with the MSC Bank fraud case.
Reacting to the development, Sharad Pawar said he would have been ;surprised' had there not been such an action against him given the 'huge' response he received during his Maharashtra Assembly election campaign.
Maharashtra will head for voting in the Assembly polls on October 21. The case has been registered weeks ahead of the election in the Bharatiya Janata Party (BJP)-governed state.
In a sarcastic comment, Sharad Pawar also 'thanked' the central agency for naming him in the case relating to the bank of which he 'is not a member and was not involved in its decision-making' in any way.
News agency ANI has quoted Sharad Pawar as saying: “I have no problem if I have to go to jail. I will be pleased as I have never had this experience. If someone plans to send me to jail, I welcome it. (sic)”
What is the MSC Bank case?
It is alleged that MSC Bank sanctioned loans in a fraudulent manner to office bearers and directors of local co-operative sugar factories (CSFs), spinning mills and other processing units, as well as the bank's then top executives.
The alleged fraud was committed between 2001 and 2011 and is pegged at Rs 25,000 crore.
Most of MSC Bank’s 48 directors at the time were elected representatives from various political parties.
These directors included 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.
What’s happening now?
ED is currently investigating the case. Sources told Moneycontrol earlier that loans had been provided to CSFs by the officials of the MSC Bank who were allegedly connected to the owners.
The sanctioned loans are suspected to have been done only to extend benefits to the directors of the lender for personal gains, thereby defrauding and cheating the bank and its shareholders.
In many cases, loans sanctioned were sanctioned to these CSFs despite their weak financials and negative net worth with no collateral. The investigating agency is probing allegations.
The CSFs subsequently turned sick due to alleged mismanagement and underutilisation of capacity. They were sold by the board at a price below the reserve price offering wrongful gains to the purchaser.
ED is probing why these CSFs were sold at that price and at a price favouring the purchaser with no rules followed to fix the reserve price in some cases.
Moneycontrol reported earlier that the investigation would also cover allegations of forged documents like sale certificates made in some instances in which the actual sale had been done at a much lower level than specified.