Why have you approached the Bombay High Court and why have you requested to order an inquiry into the working of the Maharashtra State Cooperative Bank (MSC Bank)?
The noted social activist Anna Hazare and the Right to Information activist Surendra Mohan Arora have filed civil and criminal public interest litigations through me in the Bombay High Court to demand action against those who indulged in corruption in the bank.
Manikrao Bhimrao Jadhav, a resident of Latur district has done a thorough research in matters raised through these PILs. He collected the necessary information from the respective offices under RTI and by gathering the audit reports of all cooperative sugar factories (CSFs) and interviewing some of the shareholders of CSFs.
Jadhav has handed over the material collected by him to Anna Hazare to file this petition. After studying various audit reports of MSC Bank, a charge-sheet was filed in this case.
We were convinced that there is a major scam in this bank in loans disbursement and the sale of sugar factories and Cooperative Spinning Mills (CSMs).
We have approached the high court by way of a criminal PIL seeking a direction to register a FIR against the directors and top executives -- erring Chairman, MDs, Directors, CEOs and managerial staff -- who are in-charge of MSC Bank and responsible office bearers and directors of CSFs and CSMs and other processing units that were illegally given loans by MSC Bank.
We have also sought direction against the erring office bearers of all the District Central Cooperative Banks (DCCBs) in Maharashtra and the Pen Urban Cooperative Bank that have disbursed large amount of loans fraudulently.
In your client’s complaint filed to the Economic Offences Wing, you have termed the Nationalist Congress Party Chief Sharad Pawar as the kingpin of the scam. Why?
The approximate amount of loans that were fraudulently disbursed by the MSC Bank or DCC banks or by the Pen Urban Cooperative Bank are more than Rs 25,000 crore.
Both Anna Hazare and Arora have held Sharad Pawar responsible for this humongous loss for the government. Arora in his PIL had said that loans were disbursed at the behest of kingpin Sharad Pawar, who exercises absolute control over the affairs of MSC and DCC banks in Maharashtra and without his prior approval, no loans were sanctioned.
We are confident that during investigations and recording of witnesses’ statements, Sharad Pawar’s role in looting these banks will be established. Our petition has held 77 directors responsible for this scam. Of these, 57 belong to the NCP alone. This also proves Sharad Pawar’s role.
You have alleged that illegal loans were distributed to cooperative sugar factories. Can you explain these allegation?
CSFs or private limited companies were illegally given loans without securing any charge, at subsidised interest rates, whose loans were restructured, solely because some of the directors of the board had financial or personal interest in these units.
For example, Manikaro Patil was Director of MSC Bank and Aditya Fresh Food Natural Pvt Ltd, headed by his wife, got Rs 1.94 crore as an illegally sanctioned loan. Gangadhar Deshmukh Kunturkar, a director of MSC Bank was also the Chairman of the Jai Ambika CSF, Nanded.
Despite the unit having a negative net worth, accumulated losses and short margin, an amount of Rs 94.92 crore was illegally extended as loan and that too without obtaining any collateral or security by the board of directors.
Similar irregularities were committed by Prithviraj Deshmukh, Chairman of Dongrai CSF, Madhukarrao Chavan, office bearer of Kulswamini CSF, Dr Santosh Korpe of Akola CSF, Suresh Deshmukh for Bhausaheb Deshmukh’s CSF and CSM, Rajni Patil of PDVV CSF and N V Sarnaik of Rajivji CSF.
You have also alleged that CSFs or their properties were sold illegally. How was this done?
Not only the fact that the board of directors extended loans to the units without securing any charge over the properties of such units, but also that the units were sold to their near and dear ones at throwaway rates, which neither satisfied the outstanding loans of the bank nor helped the units to recover its other dues.
The decision to sell off the borrowing units of CSFs and CSMs were taken at the respective meetings of the Executive Committee, Loan Committees and the board of directors itself.
All the directors of the board acting in the capacity of members of different committees have acted hand in glove in selling off the properties belonging to CSFs.
The sheer abuse of power by the board of directors of the bank is evident from the fact that as much as 11 CSFs were intentionally sold at a price below the reserve price, in sheer violation of the provisions of SARFAESI Act, without giving any reasons.
Shankar CSF, Yavatmal was sold to Sagar Wines Manufacturing for Rs 19.25 cr, which was Rs 3 cr below the reserved price. Ram Ganesh Gadkari CSF, Nagpur was sold to Prasad Sugar and Allied Agro Products Pvt Ltd, Ahmednagar for Rs 12.95 cr, which was almost Rs 14 cr below the reserved price.
Akola CSF, Akola was sold to Venkateshwara Power Ltd for Rs 17.10 cr, which was Rs 14 crore below the reserved price. Ambadevi CSF, Amravati was sold to Kinetic Petroleum Pvt for Rs 15.25 cr, which was Rs 8 cr below the reserved price, and Kondeshwar CSF, Amravati was sold to Sudhin Consultancy for Rs 14.01 cr, which was Rs 3 cr below the reserved price.
What should be the future course of action by police? What will be the punishment for the directors who are responsible?
We have submitted a list of 77 directors who were part of the decision-making process, which caused this humongous loss. As per our request, now the Special Investigative Team of EOW will investigate all decisions of MSC Bank, loan disbursements and sales of properties of CSFs during the period from 1-1-2002 to 31-12-2017.
This means the decisions by MSC Bank in the last 15 years will be investigated. The major corruption has happened in this period. Ideally, all directors, including former deputy chief minister Ajit Pawar, should have been arrested by the police immediately after the First Information Report was filed.
But we are disappointed that no arrest has yet been made. The same EOW has arrested builder D S Kulkarni for a Rs 300-400 crore fraud. But even after a week, EOW is not doing anything to arrest these directors in a scam of at least Rs 25,000 crore.
If found guilty, the directors can be punished with 7-10 years of rigorous imprisonment. This means the directors will be disqualified to contest any election. Even the money looted by them can be recovered after the court order.
Do you think that the state government is protecting them?
Yes. The state government is not proactive in this case. Earlier, police were not ready to file a FIR in this case. Later, the state amended the Maharashtra State Cooperative (MSC) Act, which created an open loophole to stop the inquiry announced earlier during the Congress-NCP government.
I think the state government is confused. They are thinking what would be the reactions after the arrest of Ajit Pawar and other directors, as they are now going to face assembly elections.
What is the status of an earlier inquiry conducted by then Additional Registrar Shivaji Pehenkar under Section 88 of the MSC Act?
We have intervened in a petition filed by Madhavrao Patil in the Bombay High Court. Patil has requested to end the inquiry being conducted by Shivaji Pehenkar from May 2014.
We have submitted an intervention petition in the high court that Pehenkar was hand in glove with the corrupt directors of MSC Bank. He intentionally provided them loopholes to save them. Despite three-and-half years, he could not complete his inquiry.