[Maharashtra Bank Scam Closure] Mumbai Police Opposes ED's Intervention Plea

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The Mumbai police opposed the Enforcement Directorate’s (ED) plea to intervene in their closure report concerning the alleged Rs 25,000 crore Maharashtra State Cooperative Bank scam.

[Maharashtra Bank Scam Closure] Mumbai Police Opposes ED's intervention Plea — [Maharashtra Bank Scam Closure] Mumbai Police Opposes ED’s intervention Plea

Mumbai: Today ( On June 27th): The Mumbai police opposed the Enforcement Directorate’s (ED) plea to intervene in their closure report concerning the alleged Rs 25,000 crore Maharashtra State Cooperative Bank scam.

Initially, Deputy Chief Minister Ajit Pawar was named as an accused in the case registered by the Economic Offences Wing (EOW) of the city police. However, the EOW later claimed that the apex cooperative bank had not incurred any unfair losses from the alleged fraud.

In their written response on Thursday, the EOW noted that a similar intervention plea by the ED had previously been rejected by the special court for cases involving MPs and MLAs. They pointed out that the ED’s new application reiterates the same arguments.

The EOW, which investigated the alleged scam, filed its first closure report in September 2020, which the court accepted. However, in October 2022, the EOW informed the court that they were conducting further investigations based on issues raised in protest petitions filed by the complainants and the ED.

In March this year, the EOW again sought to close the case, stating,

“there was no unfair loss to the bank due to the alleged fraud.” A former judge, appointed as an authorized officer by the cooperative commissioner, concluded that “there was no unfair loss to the bank due to the loans given to the factories (sugar mills),” and that “the bank was recovering the amount from the factories by legal means,”

as stated in the closure report.

The ED, which is investigating a money laundering case linked to the scam, recently moved the court to intervene in the hearing on the closure report.

The central agency argued that its case was based on the EOW’s FIR, and it had filed a main prosecution complaint (charge-sheet) and two supplementary charge-sheets following its investigation. The ED asserted that the closure report would impact their prosecution complaints and the proceeds of the crimes.

The EOW had originally registered a first information report (FIR) in the case under Indian Penal Code sections 406 (criminal breach of trust) and 420 (cheating), as well as relevant sections of the Prevention of Corruption Act, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.

The FIR, which followed a high court order in August 2019, alleged that loans amounting to thousands of crores of rupees, obtained by sugar cooperatives, spinning mills, and other entities from district and cooperative banks, were diverted and not repaid.

Nationalist Congress Party leader Ajit Pawar and over 70 others who were directors of the MSC Bank during the relevant period were named as accused. The FIR stated that the Maharashtra government suffered a loss of Rs 25,000 crore between January 1, 2007, and December 31, 2017, due to the alleged irregularities.

The FIR also alleged that banking and RBI regulations were violated while disbursing loans to sugar mills at very low rates and selling off assets of defaulter businesses at throwaway prices.