Mumbai: Nihal Garware of Garware Industries, who was allegedly appointed as additional director of Jammu and Kashmir bank on the recommendation of former chief minister of Jammu and Kashmir Omar Abdullah’s government, was instrumental in causing a loss to the bank to the tune of more than ₹100 crore, the Enforcement Directorate (ED) has said.
During the investigation, Garware admitted that former CM Abdullah is his friend and he was in the position of having indirect control or authority on the J&K bank at the time of his appointment, states the prosecution complaint of ED filed before a special court in Mumbai.
The agency had previously questioned Abdullah in the case, but his statement has not been included in the prosecution complaint. “It’s a legal matter that is under investigation & Omar Abdullah is cooperating fully with the investigating authorities,” said NC spokesperson Imran Dar.
Garware was arrested by ED on March 22 this year on the charges of money laundering after the agency believed he was instrumental in buying a property for the bank in the BKC area in 2010 at a much exorbitant consideration. In return, ED has claimed that Garware received kickbacks to the tune of ₹12.82 crore.
The case was first registered by CBI on November 11, 2021, against Ackruti Gold Builders and unknown persons over corruption allegations. It was alleged that the bank purchased a property in BKC, Mumbai in 2010 at a much higher price.
The bank had in 2008 published a notice inviting parties for the sale of integrated office premises at Bandra-Kurla measuring 20000 sq ft. space for the bank. Bank received applications from 25 builders and the lowest rate was ₹25,000 per sq ft.
On July 28, 2009, the bank received a letter from M/S Ashapura building ₹2,25,000 per sq ft. The bank sat on the proposal until January 2010, and then the bank published another advertisement for the purchase of the place.
In 2010, the CBI claimed the bank purchased the entire building at the rate of ₹26,000 per sq ft and the total area was 42,000 sq ft. The board approved buying the place. After the negotiation, the property was purchased for a total 63,776 sq ft chargeable area at the rate of ₹26,000 per sq ft for nine floors which was calculated at ₹180.57 crores.
It was alleged in the ED complaint that ‘there was sufficient space available for the bank for the functioning of the bank, Zonal office and treasury and there was no requirement of additional purchase of the property. ED claimed that the first advertisement was issued for buying 20,000 sq ft of land and later the bank ended up buying 63,776 sq ft of space.
“J&K bank purchased a building namely Ackruti Gold for its zonal office at BKC from M/S Vishal Techno Commerce Ltd for approximately ₹172 crores. Additional Director of the bank Nihal Garware was a member of the Estate Committee that decided on the purchase of the building. He was nominated to negotiate the prices with the seller of the property,” ED said in its complaint.
The complaint filed by ED last month against Garware states, “Garware is not the resident of the state of Jammu and Kashmir. At the time of his appointment, he was a Mumbai-based businessman. His educational qualification was only graduation with BA and did not have any experience of working in any financial institution.”
ED claimed that the investigation revealed that Garware was appointed as an additional director on the recommendation of the government and was made a member of the Estate Committee on the same day of his appointment.
In his statement given on April 20, by former chairman of the bank, Haseeb Drabu, said “Name of Garware was recommended to him telephonically and in a personal meeting by Devendra Singh Rana, who was the then political advisor to the chief minister of Jammu and Kashmir – Omar Abdullah.”
“It was felt by everyone in the board that he would know what the market rates were in different locations and given that he came with a corporate background in the Garware industries he would be better equipped to negotiate,” Drabu said in his statement before ED.
ED claimed that Nihal himself had admitted his close association with Abdullah in his statement where he said, “His friend and chief minister of Jammu and Kashmir was in the position of having indirect control or authority on the J&K bank at the time of his appointment.”
Nihal Garware bought a property in Delhi through the money he received from the deal as a kickback, ED said.
“Vyomesh Shah, the then Director of M/s. Vishal Techno Commerce Ltd.(seller) proposed to pay the amount of gratification to Garware by cheque. Garware asked his chartered accountant Bharat Shah to arrange an entity in whose name the cheques could be issued by the seller and method to obtain his gratification in cash without the trail of cash reaching him,” reads the ED prosecution complaint.
The complaint further states, “Bharat Shah with the help of his friend Rakesh Doshi, CA and his network of other chartered accountant friends identified the name of M/s. AMR Construction Ltd., Hyderabad who was ready to receive the cheques and issue bogus invoices of brokerage without providing the brokerage services to the seller of the property.”
The company in return gave the money in cash. “Shah and Garware used to receive messages regarding the collection of cash from an angadia in Mumbai. He used to provide note numbers and instruct Sh. Borkar, an employee of Nihal Garware to collect cash from different Angadiyas,” ED complaint said.
Garware with the help of his CA received cash in his various companies through various accommodating entries. Through these companies, he made payment for the property he purchased in Delhi.
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The CBI which had first registered the case in the matter, on Friday, obtained permission from the court to question Garware. Garware is presently being treated at Breach Candy hospital. The court has asked the officials to first check with his doctors if he is in a good condition, then only proceed with questioning him.
