The Enforcement Directorate (ED) detained Shiv Sena MP Sanjay Raut who, along with his boss Uddhav Thackeray, suddenly remembered their ideology used to be Hindutva, yesterday in connection with the alleged Patra Chawl tenant rehabilitation scam. While Raut has been in news for the wrong reasons for more than a year, people are asking what this particular scam is all about, for which the ED raided his house in Mumbai. The Shiv Sena leader was later arrested in the case on Sunday.
The ED had earlier issued Raut two summonses, the latest being on 27 July, following which the agency that investigates financial frauds took action. The agency summoned him for questioning in the money laundering case linked to alleged irregularities in the redevelopment of Patra Chawl and related transactions involving his wife and associates.
While Raut had appeared before the central agency to record his statement on 1 July, he ignored the summonses twice, saying he was busy with the parliament session.
The ED later arrested Raut in connection with the case. The agency had earlier attached Raut’s properties in Dadar and Alibaug. Raut had said he would be able to appear before the agency not before 7 August.
What is the Patra Chawl redevelopment project scam?
As many Indians even outside Mumbai must be knowing, thanks to Bollywood cinema, a chawl is a kind of slum-like human habitation where scores or hundreds of one-room tenements with a few toilets to serve all tenants. Patra Chawl is such a human settlement also known as Siddharth Nagar. It is located in the northern Mumbai suburb of Goregaon.
As for the scam, Guru Ashish Construction Private Limited (GACPL) signed an agreement with the Maharashtra Housing and Area Development Authority (MHADA) in 2007 to provide new homes to 672 tenants of the chawl and then develop flats for MHADA and sell the remaining area to private developers.
GACPL, the tenants’ society and MHADA signed a tripartite agreement for the redevelopment of the chawl but that has only been on paper.
For the past 14 years, residents have been waiting to get their homes. That is the main part of the scam.
What has the ED found in its probe?
In addition to the main part of the scam that I explained earlier, the ED says GACPL launched a project called The Meadows and received bookings worth approximately Rs 138 crore from flat buyers.
Things went awry when tenants started complaining about the non-payment of the monthly rent to them by GACPL and the delay in the project. The developer was supposed to pay them the rent till the project was completed, but that was only done till 2014-15. Around the same time, GACPL had sold FSI to nine private developers without constructing a single rehabilitation home.
Soon after this, MHADA issued a termination notice to GACPL in January 2018 due to non-payment of rent and other irregularities. However, the nine private developers who had bought FSI from the GACPL moved the Bombay High Court, which stalled the project.
In 2020, the Maharashtra government appointed a one-member committee led by retired chief secretary Johnny Joseph to study and recommend solutions for the rehabilitation and rental payment to 672 tenants.
How is Sanjay Raut involved in the scam?
The Enforcement Directorate says Sanjay Raut’s close associate Pravin Raut and other directors of GACPL did not build a single house for the 672 displaced tenants. Instead, they sold the floor space index to nine private developers for Rs 901.79 crore.
According to the ED, GACPL’s total proceeds of crime from “illegal activities” amount to Rs 1,039.79 crore. The probe shows that Pravin Raut received Rs 100 crore from HDIL and “diverted” it to various accounts of “his close associates, family members, and business entities”, including Sanjay Raut’s family.
The ED also stated that in 2010, Sanjay Raut’s wife Varsha received Rs 83 lakh in criminal proceeds directly or indirectly from Pravin Raut’s wife Madhuri. Varsha used this money to purchase a Dadar apartment.
After the ED investigation was launched, Varsha transferred Rs 55 lakh to Madhuri.
What is the current status of the project?
As I said, due to the cases in the high court, the project was stalled. But in June 2021, the state cabinet approved the redevelopment of the chawl once again and the government resolution was issued in July 2021. On 22 February this year, the stalled construction work was restarted on the orders of the then chief minister Uddhav Thackeray.
Why does the ED need Sanjay Raut in its custody?
The ED wants to question him about his “business and other links” with Pravin Raut, as well as about his wife’s property deals. It is not clear whether the ED will arrest him. According to sources, ED officials are not allowing anybody in the Raut family to speak over the phone. They said documents are being sought by the team, and that the family has not been informed about the next course of action. Raut was being uncooperative during the raid at his house, sources added.
How is the Shiv Sena defending itself?
Shiv Sena president Uddhav Thackeray said the ED may arrest Raut, and alleged that the central agency’s ongoing action against him was part of a “conspiracy” to finish off the party. Thackeray addressed party leaders and workers from District Thane at his house Matoshree.
“ED guests are at Sanjay Raut’s house. He may get arrested. What conspiracy is this? Shiv Sena gives strength to Hindus and Marathi people and hence there is a conspiracy to finish off the party,” he said, adding that people whom the Sena helped grow politically are now switching loyalty.
What do the Maharashtra government and the opposition say?
Maharashtra CM Eknath Shinde said if Raut was innocent, he should not be afraid of the ED action. Shinde said, “Raut has declared that he has not done anything wrong. If that is so, why fear a probe? Let it happen. Why fear if you are innocent?”
The BJP in Maharashtra, meanwhile, also said Raut should not be afraid of the ED action if he has not done anything wrong. Former minister Girish Mahajan said, “Sanjay Raut is unnecessarily invoking late Balasaheb Thackeray and instigating Sena workers against the Union government. He should not be afraid of anything if he has done nothing wrong.”
Leader of Opposition Ajit Pawar, however, wondered why the ED repeatedly wants to investigate Raut. Congress spokesperson Sachin Sawant said the ED conducting a search at Raut’s residence depicts a “sorry picture” of democracy and alleged that the BJP wanted to “silence” all the opposition parties.
“Many people got notices from the Income Tax, ED, and the Central Bureau of Investigation. Only Raut will be able to tell why the probe agency (ED) wants to investigate him repeatedly,” Pawar said.
NCP MP Supriya Sule said this issue will be raised in the parliament.