Two years after declaring the closure, the Economic Offences Wing (EOW) the Mumbai police has reopened the investigation into the scam at Maharashtra State Co-operative (MSC) Bank. The case involves several political heavyweights, including Nationalist Congress Party leader Ajit Pawar and 75 directors of MSC Bank and other district central co-operative banks.
Special public prosecutor Ajay Misar on Saturday told the Special MP and MLAs’ Court that they wanted to carry out further inquiry under section 173 (8) of the Code of Criminal Procedure, 1973. Special judge Rahul Rokade was also informed that the agency would probe the points raised by the protest petitioners and the Enforcement Directorate, which is also investigating the matter.
“The court has sought a reply from all the protest petitioners and adjourned the matter to November 18,” advocate Satish Talekar said. Talekar represents social activist Anna Hazare, one of the complainants, who alleged that the bank had suffered losses to the tune of ₹25,000 crore as a result of financial irregularities.
Another protest petition was filed by activists Surinder Arora and Manik Jadhav after the EOW filed a C-summary (closure report) in September 2020.
The petitioners had alleged that the closure report giving a clean chit to the then finance minister Pawar and 75 others was questionable as it was based on the statement of the then MSC Bank’s managing director, Ajit Deshmukh, who was also named in the alleged scam. They had claimed that though there was enough evidence and statements of other officials confirming the scam, Deshmukh had given a statement that the bank had recovered the alleged losses and the allegations were of civil nature.
The EOW had in 2018 started the probe after receiving directions from the Bombay high court, which was hearing a public interest litigation petition filed by Arora.
Referring to the lapses in the EOW investigation, the petitioners had said the findings of misappropriation and mismanagement recorded in the NABARD inspection report, Joshi and Nair report, the inquiry under section 83 of the Maharashtra Co-operative Societies Act, and the chargesheet filed under section 88 of the Maharashtra Co-operative Societies Act were ignored, holding that the bank had managed to recover the losses.
The petitioners had opposed the closure report on the grounds that it was a serious economic offence and required thorough investigation.
Hazare, who had also filed a protest petition, had alleged that documentary evidence revealed the involvement of several political leaders in the scam, but the EOW “did not even touch upon the allegations”.
The EOW had filed an FIR under sections 406, 409, 420, 465, 467, 468, 471, 120B and 34 of the Indian Penal Code, section 13 (a)(b)(c) of the Prevention of Corruption Act, and section 29 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
MSC Bank that controls credit to the co-operative sector was mired in controversy in 2011 after an inquiry report by NABARD found the bank was in the red with a negative of ₹144 crore. The report indicted the board of directors for financial mismanagement that led to ballooning of non-performing assets. This was largely due to handing out loans to sugar co-operatives and spinning mills in violation of the norms.