Mumbai: Pravin Raut, a former director of a company called Guru Ashish Construction Pvt Ltd, was arrested in a money laundering probe linked to a ₹ 1,034 crore land ‘scam’ related to the re-development of a ‘chawl’ in Mumbai.
Maharashtra-based businessman was arrested after being questioned at the ED office in Mumbai.
Premises linked to him were searched by the agency on Tuesday.
Mr Raut was produced before a special Prevention of Money Laundering Act (PMLA) court in Mumbai that sent him to ED custody for eight days till February 9, the agency said in a statement.
“Pravin Raut was found involved in offence of money laundering and to unearth the money trail and the siphoning of funds running into more than 1,000 crore, he was arrested…,” it said.
The ED said Guru Ashish Construction Pvt Ltd was involved in re-development of Patra ‘chawl’ in suburban Mumbai’s Goregaon area. The ‘chawl’ had 672 tenants in tenements on 47 acres land belonging to the Maharashtra Housing Area Development Authority (MHADA).
Guru Ashish Construction Pvt Ltd is a subsidiary company of the Housing Development Infrastructure Ltd (HDIL).
The HDIL is under investigation by the ED and a few other agencies in connection with the around ₹ 4,300 crore alleged fraud at the Punjab and Maharashtra Cooperative (PMC) Bank.
The ED said the company (Guru Ashish) had entered into a “tripartite agreement’ with the tenants and the MHADA to re-develop the ‘chawl’.
“Pravin Raut along with Rakesh Kumar Wadhawan and Sarang Wadhawan, directors of Guru Ashish Constructions Pvt Ltd, in connivance with others illegally sold FSI (floor space index) to various builders for ₹ 1,034 crore.
“This was done without constructing the rehab flats and flats to be handed over to MHADA, which was the pre-requisite,” it alleged.
Mr Raut, being the director of Guru Ashish Construction Pvt Ltd, has played an “active role” in the re-development project, and in connivance with Rakesh Kumar Wadhawan and Sarang Wadhawan, managed to “divert” the proceeds of crime of more than ₹ 1,000 crore by “harming” the interest of 672 tenants and buyers, the ED said.
“In addition to ₹ 1,034 crore received from various builders, they had also obtained bank loans,” the agency stated.
The ED alleged that Mr Raut, in 2010, received ₹ 95 crore in his bank account in the “guise of sale of equity and land deal though the company was not able to complete the project and had not generated any income”.
The Mumbai Police economic offences wing (EOW) had first filed an FIR to probe these allegations made in the re-development of the ‘chawl’.
The ED last year had also attached assets worth ₹ 72 crore of Mr Raut in connection with the PMC Bank money laundering case.
It had then said that “Rs 95 crore has been siphoned off through HDIL by one of the accused Pravin Raut in active conspiracy and connivance with various persons”.
“The source of the funds was illegally availed loans/advances by HDIL from PMC Bank. There was no document or agreement in support of these payments made to Pravin Raut,” the ED had alleged in a statement.
It said “as per the ledger of HDIL, the funds were given to Pravin Raut for acquiring land in Palghar area”.
The agency had also questioned Shiv Sena MP Sanjay Raut’s wife Varsha Raut last year in connection with the PMC Bank case and her purported links with Pravin Raut’s wife.
It had said that Pravin Raut “paid an amount of ₹ 1.6 crore to his wife Madhuri Pravin Raut from the proceeds of crime. Out of the said money, Madhuri Raut transferred ₹ 55 lakh (Rs 50 lakh on December 23, 2010 and ₹ 5 lakh on March 15, 2011) as interest free loan to Varsha Raut, who is the wife of Sanjay Raut”.
“The amount was further utilised for purchase of flat in Dadar East, Mumbai,” the ED had said.
Probe found that Varsha Sanjay Raut and Madhuri Pravin Raut “are partners in Avani Construction and Varsha Raut has received ₹ 12 lakh from this entity (as overdrawn capital converted to loan) on a contribution of mere ₹ 5,625”.
The ED had filed a criminal case of money laundering in October 2020 to probe the alleged loan fraud in the PMC Bank and had booked HDIL, its promoters Rakesh Kumar Wadhawan, his son Sarang Wadhawan, its former chairman Waryam Singh and ex-managing director Joy Thomas.
It took cognisance of a Mumbai Police economic offences wing FIR against them that charged them for causing “wrongful loss, prima facie to the tune of ₹ 4,355 crore to PMC Bank, and corresponding gains to themselves”.