New Delhi/Lucknow, (Asian independent) In a big development in the Uttar Pradesh sugar mill scam, the Enforcement Directorate (ED) on Tuesday attached seven sugar mills valued at Rs 1,097 crore in the northern state belonging to former MLC Mohammad Iqbal, which he had bought at a throwaway price of Rs 60.28 crore through two shell companies that he had formed in the name of his family members.
An ED official told IANS, “The agency has attached seven sugar mills of Iqbal worth Rs 1,097 crore. Iqbal is a former MLC from Saharanpur.”
The official said that the seven sugar mills owned by Iqbal and his family members have been attached under the provisions of the Prevention of Money Laundering Act (PMLA).
He added that the shell companies of Iqbal and his family members, namely Namrata Marketing Pvt Ltd and Giriasho Company Pvt Ltd, participated in the bidding process of disinvestment of sugar mills of the Uttar Pradesh government in 2010-11 and acquired seven sugar mills through laundering of illegitimate money using various shell companies with dummy directors and sham transactions.
The official said: “The ED probe revealed that during 2010-2011, Iqbal’s two companies participated in the bidding process for sugar mills of the Uttar Pradesh Rajya Chini Avam Ganna Vikas Nigam Limited (UPRCGVNL). The companies did not submit the shareholding pattern or the background of key promoters which were the stipulated conditions at the time of bidding.”
He said the ED has also noticed that the funds were “infused” either into these companies through “cash deposits” made in shell companies’ bank accounts and further routed into these two companies through sham transactions or there was infusion of funds disguised in the form of “share application money for subscription to shares” of these two companies at a high premium.
The official further said that for the purpose of registration and execution of sale deeds, the two companies purchased seven shell companies — Ablaze Sugar Mills Private Limited, Adarsha Sugar Solutions Private Limited, Agile Sugar India Private Limited, Eikon Sugar Mills Private Limited, Majesty Sugar Solutions Private Limited, Mastiff Sugar Solution Private Limited and Okra Sugars Private Limited — and treated them as their special purpose vehicles (SPVs).
“All these companies were incorporated on the same date in 2011,” he said.
The official said that to launder the money of Iqbal, his associates and family members were used to acquire and beneficially own seven sugar mills — Laxmiganj Sugar Unit in Kushinagar; Bareilly Unit in Nekpur and Saidpur Village, Bareilly; Deoria Unit in Salempur Majholi, Deoria; Hardoi Unit in Nanankganj, Grunt, Gopamau, Hardoi; Barabanki Unit in Pargana-Nawabganj, Barabanki; Ramkola Unit in Pargana-Sidhua Jogana, Kushinagar; and Chhitauni Unit in Pargana-Sidhua, Padrauna and Kushinagar.
The ED official said the sugar mills were sold to Iqbal and his family members at a throwaway price of Rs 60.28 crore through disinvestment or sales process in the year 2010-11.
The official said that during its probe, the ED also recorded the statements of the key associates of Iqbal, along with the accommodation entry operator and dummy directors of various companies.
“Evidences were also collected from banks, the Ministry of Corporate Affairs, district property registration authorities and the Income Tax department. Further, search operations were also conducted at the residence of Iqbal and his associates in Saharanpur and related premises in Delhi, wherein incriminating documents, valuables and records were recovered,” the official said.
The official added that the financial probe agency had registered a case of money laundering against Iqbal and others based on the investigations conducted by the Serious Fraud Investigation Office (SFIO) and the Ministry of Corporate Affairs relating to the acquisition of assets through illegitimate means in 2010-2011 by the former MLC and others, and also on the basis of the CBI FIR.
The official said that the performance audit report of the Comptroller and Auditor General of India (CAG) on ‘Sale of Sugar Mills of Uttar Pradesh State Sugar Corporation Limited’ for the year ended March 31, 2011 also highlighted the administrative and financial discrepancies or irregularities in the disinvestment or sale process of the sale of sugar mills in Bareilly, Kushinagar, Hardoi, Deoria and Barabanki, which were acquired by two companies of Iqbal.
Even retired IAS officer Netram, who was a close confidant of the then Chief Minister and Bahujan Samaj Party (BSP) supremo Mayawati, and other senior officials have come under the ED scanner in connection with the case.
According to ED officials, 11 sugar mills were sold during 2010-11, when the BSP-led government was in power in Uttar Pradesh.
