Bitter co-ops. Maharashtra co-operative fraud: How co-op sugar mills become private properties

As the Jarandeshwar Sugar Co-operative Mill in Satara district failed to repay its instalment of loan, the Maharashtra State Co-operative Bank (MSCB) auctioned it for ₹65.75 crore in 2010.

Guru Commodity Services Pvt. Ltd, a society with a turnover of ₹63 lakh, purchased the mill in the auction, says Shalinitai Patil who once headed the mill. Patil says that the actual price of the mill, the land and other assets is at least ₹2,000 crore. She alleges that there was a “conspiracy” to grab the mill and its land.

Read also: How politicians are pocketing sugar mills and their vast lands

Wife of former Maharashtra Chief Minister Vasantdada Patil, Shalinitai was once known as a feisty politician in the State. For a brief period, she was with Sharad Pawar’s Nationalist Congress Party (NCP) and also served as a Member of the State Legislature (MLA). But her political career went offtrack after she locked horns with the Pawar family.

In July 2021, the Enforcement Directorate attached the properties including land, building and structure, and plant and machinery of Jarandeshwar Mill. The ED is probing the entire case under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).

Money matters

Investigations conducted under the PMLA revealed that MSCB arranged an auction of Jarandeshwar at an undervalued price and without following due procedure.

Guru Commodity Services purchased the mill and immediately leased it to Jarandeshwar Sugar Mills Pvt Ltd. Interestingly, Sparkling Soil Pvt. Ltd holds the majority of shares of Jarandeshwar Sugar Mills Pvt Ltd.

ED investigations revealed that Sparkling Soil is related to Maharashtra Deputy Chief Minister Ajit Pawar and his wife Sunetra Pawar. Interestingly, when the mill was auctioned by MSCB, Ajit Pawar was on the Board of MSCB.

The ED, in its note, stated that investigations further revealed that though Guru Commodity Services (a dummy company) was used to acquire the sugar mill, it was actually controlled and run by Jarandeshwar Sugar Mills.

“Further, the mill has been used as a vehicle by Jarandeshwar Sugar Mills for obtaining a loan to the tune of ₹700 crore from Pune District Central Co-operative Bank and others from the year 2010 till date. Thus, the assets held in the name of Guru Commodity Services (leased to Jarandeshwar Sugar Mills Pvt. Ltd.) in the form of land, building and structure, plant and machinery of Jarandeshwar, being proceeds of crime, the same has been provisionally attached under PMLA,” the ED stated in its note.

‘All leaders hand in glove’

Following the ED probe into Jarandeshwar Sugar Mill, BJP State Unit President Chandrakant Patil dashed off a letter to Home Minister Amit Shah demanding an ED probe into the sale of other 30 co-operative sugar mills. However, two of these 30 factories were purchased by companies related to BJP leader and Union Minister Nitin Gadkari. In 2013, social activist Medha Patkar had alleged that two mills were given to Gadkari-related companies at a throwaway price.

Speaking to reporters recently, Deputy Chief Minister Ajit Pawar denied any wrongdoing. He said: “There have been several probes in the past into this affair by agencies such as the State CID, the Anti-Corruption Bureau and the Economic Offences Wing, but nothing came of them.” He added that he was being targeted by the BJP-led government at the Centre.

BJP leaders, including State President Patil and former Chief Minister Devendra Fadnavis, have jumped into action to defend Gadkari. Patil told reporters that he had only quoted the list of mills submitted to the Bombay High Court when a writ petition was filed, and already Gadkari had clarified that he paid a much higher amount for the factories than the price decided by the bank.

“However, he (Gadkari) himself has said that he is open to any probe,” Patil claimed.

“All party leaders are working hand in glove. They start co-operative mills with the support of the State’s concessions and subsidies and then slowly convert these mills into private properties. Politicos have invented the official mechanism to grab public money and land,” said farmer Babasaheb Savat.

Part 1 of the series: How politicians are pocketing sugar mills and their vast lands

Part 3 of the series:Maharashtra co-operative fraud: Endgame for co-operative sugar factories?

(This is the second of a three-part series)