MSC Bank scam: Day-long ED grilling for Rohit Pawar

The case pertains to money-laundering and sale of cooperative sugar factories at dirt cheap prices

Rohit Pawar, the grandnephew of NCP supremo Sharad Pawar, faced extensive questioning by the ED at their Mumbai office in Ballard Estate, close to the NCP office on Wednesday. The inquiry is linked to the multi-thousand crore MSC Bank money laundering scam and specifically focuses on the sale of Kannad Sahakari Sakhar Karkhana (KSSK) to Baramati Agro, associated with Rohit. Workers mentioned a reduced turnout, attributing it to the party division following Ajit Pawar’s exit, suggesting a larger presence if not for the internal changes amid the ED’s scrutiny of Pawar family members.

NCP workers protesting near ED office. Pic/Anurag Ahire

The day before his visit to the ED office, junior Pawar tweeted, “I will cooperate with the agency. But looking at the current politics of revenge, as there is a lot of pressure from the government on all the systems, under this pressure, if ED takes any wrong action against me, no one should be afraid. Instead, everyone should stand united with respected Pawar sahib and every person who preserves the self-respect of Maharashtra and believes in the constitution. Because we want to maintain the self-respect of Maharashtra without bowing to anyone and preserve the Maharashtrian religion.”

On Wednesday, before heading to the ED office, he visited Sharad Pawar at the NCP office a few hundred metres away. Seeking blessings from Sharad Pawar and touching Supriya Sule’s feet, he uttered “Satyamevajyate.” Sule accompanied him to the ED office. Speaking to the media outside the ED office, Sule said, “The data of the government presented in the parliament itself says that 95 per cent of cases of central agencies, which includes ED, income tax, CBI, are against the Opposition parties. There is nothing more I can comment on, and we have nothing to hide. We will cooperate with the agency, and we have faith in ED that they will hear him as well.”

Rohit Pawar at the NCP office surrounded by party workers before going to the ED office. Pic/Anurag Ahire

While the ED was questioning junior Pawar, NCP workers assembled outside the ED office. However, the police intervened, allowing them to protest only outside the NCP office. Some workers turned aggressive and attempted to break the barricades, resulting in the detention of five workers. The workers were alarmed by the relatively low turnout during the questioning of a Pawar family member.

The party anticipated a larger show of strength, with expectations that “the numbers would have been in thousands had the Ajit Pawar camp not exited.” The departure of Ajit Pawar has seemingly caused confusion within the party cadre, as they grapple with deciding which faction to align with. A worker protesting against junior Pawar’s questioning at the NCP office mentioned, “The exit of Ajit Pawar is somewhat weakening the party cadre.”

Case against junior Pawar

Earlier this month, the ED searched Baramati Agro Limited in Pune’s Pimpri Chinchwad, and after the raids, Rohit Pawar, currently serving as the CEO of the company, was summoned. The company has been under scrutiny in the ED’s money laundering case. The ED also raided the Kannad Sugar Mill in Sambhaji Nagar. The money laundering investigation related to Baramati Agro centres around allegations of cash diversion and the deposit of earnest payments by a company involved in bidding for the distressed Maharashtra-based cooperative sugar factory, Kannada Sahakari Sakhar Karkhana (SSK).

The investigation extended to the premises of Hitech Engineering Corporation, involving Rajesh Ingavle, the director of Hi-tech Engineering Corporation India Ltd., and Sanjay Awate, associated with the same company. Samruddhi Sugar Mill faced scrutiny as well. Official sources reveal that the ED’s investigation has uncovered numerous irregularities in the sale of Kannad Sahakari Sakhar Karkhana (SSK).

The agency suspects collusion between Baramati Agro and Hitech in manipulating the auction process to secure an unfair bid. Alongside Baramati Agro, two other companies, Hitech Engg. Corporation India Ltd, and Samruddhi Sugar Private Limited, participated in the auction proceedings. Scrutiny of bank accounts revealed that on August 25, 2012, Baramati Agro Ltd. transferred R5 crore to Hitech Engg., which was subsequently utilised as an Earnest Money Deposit (EMD) for the auction of Kannad SSK just two days later.

Baramati Agro acquired the factory for Rs 50 crore, a price significantly undervalued and suspected to result from a manipulated auction under the Maharashtra State Co-operative Bank, according to the anti-money laundering agency. The MSCB scam case, at the core of this investigation, revolves around alleged improper loans granted to sugar factories by MSCB officials. These loans, even after turning into Non-Performing Assets, were purportedly sold at below-market value to relatives of the accused.

The ED initiated an investigation in 2019 based on an FIR filed by Mumbai police’s Economic Offence Wing (EOW) following the Bombay High Court’s directives. The FIR alleged fraudulent sales of cooperative sugar factories at low prices by officials and directors of Maharashtra State Cooperative Bank (MSCB) to related entities without proper procedure. In 2020, the EOW filed a closure report, but the ED intervened against it. In October 2022, the Mumbai Police EOW started probing points raised by protest petitioners and the ED, as informed to the court for MLAs and MPs.

200-300
No of NCP workers protesting

2020
Year EOW had filed a closure report in the case

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