ED restores Rs 290 crore properties in Maharashtra co-op bank scam

Photo: PTI

On January 14, a PMLA (Prevention of Money Laundering Act) court ordered the restoration of properties worth Rs 289.54 crore to the authorities under the Maharashtra Protection of Interest of Depositors (MPID) Act. This was in connection with a case involving Pen Co-operative Urban Bank Ltd.

The Enforcement Directorate (ED) had initially attached these properties under the PMLA after it was found that the bank's former officials had allegedly misused the bank’s funds for their investments. The ED's investigation began after an FIR (First Information Report) was filed by the Pen Police in Raigad district, Maharashtra.
According to the charges, the bank’s office bearers conspired with the bank’s auditors and manipulated the bank's accounts. They reported fake profits, which caused a loss of Rs 651.35 crore to the bank. As a result, the ED discovered that the money from these crimes was moved through fake cash credit accounts at the bank. These accounts were set up using cheque discounters in the market.

A portion of the money from these illegal activities was used to buy property in Raigad district. However, these properties were bought in the names of others to hide the real owners. Between May 26, 2014, and December 2, 2014, the ED attached 70.9 acres of land, valued at Rs 25.20 crore, under the PMLA Act. These were considered “benami” properties because they were not in the name of the actual owners.

In 2018, the ED filed a complaint about the case, and the trial began. Meanwhile, a person who had deposited money in the bank filed a request with the Bombay High Court in 2016, asking for the properties attached by the ED to be handed over to the MPID. The High Court agreed, and the ED was instructed to transfer the properties.

However, the ED didn’t agree with this order and filed a plea in 2017 to stop it. After some time, in 2019, the MPID asked the PMLA court to confiscate these properties for the benefit of the depositors.

Pen Bank had around two lakh depositors and 42,000 shareholders, many of whom had lost their money in the scam. Considering the best interests of these depositors, the ED decided to drop its objection in the court.

The ED then filed a document in court showing that they were willing to follow the High Court's 2016 order and return the properties to MPID. On January 14, the PMLA court agreed with this decision and ordered the properties to be handed over to the competent authority under the MPID Act. This was seen as an important step toward helping the depositors who had been affected by the scam.

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