In a big development in the Uttar Pradesh sugar mill scam, the Enforcement Directorate (ED) on Tuesday attached properties to the tune of Rs 1,000 crore, including the properties of former MLC Mohammad Iqbal. Enforcement Directorate, Lucknow Zonal Office, has attached seven sugar mills owned by Mohammad Iqbal and his family members valuing about Rs 1097,18,10,250 (approx Rs 1,000 crore) under the provisions of the Prevention of Money Laundering Act, 2002.
Earlier, ED Lucknow Zone has recorded a case under Prevention of Money Laundering Act, 2002 against Mohammad Iqbal, ex- MLC Saharanpur and others based on the investigations conducted by Serious Fraud Investigation Office (SFIO), Ministry of Corporate Affairs, Delhi relating to acquisition of assets through illegitimate means in 2010-2011 by Iqbal and others.
Namrata Marketing P Ltd and Giriasho Company P Ltd., shell companies under the control of Iqbal and family members, participated in the bidding process of disinvestment of sugar mills of the UP government during 2010-11 and acquired 7 sugar mills through laundering of illegitimate money through various shell companies having dummy directors and sham transactions.
The Performance Audit Report of the Comptroller and Auditor General of India (C & AG) 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/irregularities in the disinvestment/sale process of the sale of sugar mills at Bareilly, Kushinagar, Hardoi, Deoria & Barabanki which were acquired by Namrata Marketing P Ltd and Giriasho Company P Ltd., companies under the control of Mohd. Iqbal and his associates.
The CBI has also recorded FIR for conducting investigations into the sale of sugar mills to these companies and non-compliance of stipulated rules and procedures by the concerned government officials.
In the investigation conducted by ED under PMLA, statements of key associates of Mohammad Iqbal, accommodation entry operator and dummy directors of various companies were recorded. Evidences were also collected from banks, Ministry of Corporate Affairs, district property registration authorities & income tax department. Further, search operations were also conducted at the residence of Mohd. Iqbal and his associates in Saharanpur and related premises in Delhi wherein incriminating documents, valuables and records were recovered.
The investigation conducted by ED has revealed that during 2010-2011, Namrata Marketing P Ltd and Giriasho Company P Ltd. participated in the bidding process of sugar mills of Uttar Pradesh Rajya Chini Avam Ganna Vikas Nigam Limited (UPRCGVNL).
The companies did not submit the shareholding pattern and background of key promoters which were the stipulated conditions at the time of bidding.
It is also noticed during investigation 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 high premium.
For the purpose of registration and execution of sale deeds, the two companies, Giriasho Company Private Limited and Namrata Marketing Private Limited had purchased seven paper companies, namely
- 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
- Okra Sugars Private Limited
The above mentioned were treated as their Special Purpose Vehicles (SPV). All these companies were incorporated on the same date in 2011.
In furtherance of the criminal conspiracy of money laundering, money in the form proceeds of crime so accumulated by Mohammad Iqbal, his associates and family members were used to acquire and beneficially own 7 sugar mills i.e.
- Laxmiganj Sugar Unit, Kushinagar
- Bareilly Unit, Nekpur and Saidpur Village, Bareilly
- Deoria Unit, Salempur Majholi, Deoria
- Hardoi Unit, Nanankganj, Grunt, Gopamau, Hardoi
- Barabanki Unit, Pargana-Nawabganj, Barabanki
- Ramkola Unit, Pargana-Sidhua Jogana, Kushinagar
- Chhitauni Unit, Pargana-Sidhua, Padrauna, Kushinagar
The present valuation of land of 7 sugar mills comes to about Rs.1097,18,10,250/ (approx Rs 1,000 crore). The sugar mills were sold to Iqbal and his family members at throwaway prices only at Rs. 60.28 crore through disinvestment/sale process in the year 2010-11. It is to note that, the investigation in the case is still underway.
An ED source related to the probe said, "The agency has attached properties to the tune of Rs 1,000 crore, including seven properties of former Saharanpur MLC Mohammad Iqbal." The properties have been attached under the Prevention of Money Laundering Act (PMLA).
The ED had registered the case under relevant sections of the PMLA on the basis of an FIR which was lodged by the CBI in connection with the scam. Even retired IAS officer Netram, who was a close confidant of then Chief Minister and Bahujan Samaj Party (BSP) supremo Mayawati, and other senior officials will come under the ED scanner.
In April 2018, Uttar Pradesh Chief Minister Yogi Adityanath had recommended a CBI probe into the disinvestment of 21 sugar mills in 2010-2011. According to ED officials, 11 sugar mills were sold during 2010-11, when the BSP-led government was in power in the state.