Why Enforcement Directorate is targeting Ajit Pawar

'No action will be taken against Ajit Pawar. I am sure.'

When the Enforcement Directorate on Thursday, July 1, attached properties worth over Rs 65 crore (Rs 650 million) of a sugar mill linked to Maharashtra Deputy Chief Minister Ajit Pawar, it put the spotlight on one of the defining features of the state's political power structure -- cooperative sugar mills.

Started with the noble intention of helping sugarcane farmers realise good prices for their crop, the cooperative movement also became the foundation for political power.

By the turn of the 21st century, these mills had reportedly become a den of corruption as politicians ran them to the ground and then bought them at cheap prices to control their land holding.

Advocate Yogesh Pandey has been fighting cases against the selling of cooperative sugar mills in a dubious manner to private owners. He has appeared in different courts to give evidence of 'rampant corruption' in such transactions, but there has been no conviction for a decade now.

Pandey spoke to Rediff.com's Syed Firdaus Ashraf about the downfall of the cooperative movement in Maharashtra, which originally contributed tremendously to the state's progress, and how politicians brought it to its nadir.

What was the aim of the sugar cooperative sector when it started in Maharashtra?

It started in the 1960s. The reason it was started because the then Congress government of Maharashtra felt that private sugar mills were exploiting farmers.

The first cooperative was set up by the late Vithalrao Vikhe Patil in Ahmednagar district. It was one of its kind in the world.

Farmers came to donate funds, put in physical labour to set up this sugar mill.

The movement flourished and this contributed to the development of Maharashtra.

They were profitable. More than 75 mills were there which were running profitable till the 1990s.

The movement became so strong that such cooperatives were also formed in paper mills, banking and other sectors, even starting engineering and medical colleges.

When did it begin to fall apart?

The downfall started from late 1990s to 2000s when politicians, out of greed, started interfering in the matters of running the cooperatives.

These politicians started controlling their finances by taking control of the banks run by these cooperatives.

Earlier too, these cooperatives were controlled by politicians, but they had (a typical) Congress Socialist approach in their dealings.

They had very noble intentions and we had leaders like Yashwantrao Chavan, Shankarrao Mohite Patil and Shankarrao Kale among many others.

One sugar mill supported almost 500,000 people. Ordinary farmers set up these cooperatives by putting in as less as Rs 5,000 from their own pockets and they reaped the benefit by getting a good price for the sugarcane they produce.

They prospered and so did Maharashtra and India.

What did the politicians do to break it?

(There was) misappropriation of funds. Money was diverted from cooperative banks for political activities and there was no checks and balances.

Misappropriation of funds in the name of diversifying became the norm.

Soon, sugar cooperative chairman elections became more important than an MLA's election.

If you became the chairman of a sugar cooperative, you had your own fiefdom.

Entire taluka will be in your control if you were the chairman of a sugar mill.

There was huge money involved and with that came power.

After 2004-2005 these chairmen of sugar cooperatives started their own private sugar mills.

And today, more than 70 per cent of Maharashtra's sugar mills are owned by private people.

Interestingly, these private cooperative mills are run by the grandchildren of people who started the cooperative movement to defeat privatisation.

You have been fighting court cases against the fraud in the sugar cooperative sector. How did that happen?

The directors of cooperative sugar mills took loans from Maharashtra state cooperative banks.

They remained unpaid and interest arrears started rising.

Then, the Maharashtra government stepped in and cleared the debts of these mills.

It was a clear case of siphoning off money, but who will point it out when the people who are taking the loans are the same as who are running the government?

And interestingly, when these cooperative sugar mills went bankrupt, the directors on the board or their relatives bought them at dirt cheap rates.

If you check out, (you will find that) 41 out of 70 cooperative mills were sold between 2010 and 2014 and the private buyers were the directors of the cooperative mills or their relatives.

In short, they only are giving loans to themselves, they only only are the guarantors and they only turn up as buyers.

It is an open and shut scam.

They say the mills are in huge loss and that the machineries have zero value, but what about the value of the land? They don't tell you about this as they buy it very cheap. This is the modus operandi.

What about the Ajit Pawar case?

It is similar to what I said above.

Ajit Pawar took over the mill, Jarandeshwar Sahkari Sugar Karkhana, located at Chimangaon-Koregaon in Satara district.

Shalinitai Patil (the late Maharashtra chief minister Vasantdada Patil's wife) has been fighting a case against him as she was the chairman of this mill.

Was Devendra Fadnavis's Bharatiya Janata Party government not aware of this during its term?

Yes, they were aware, but they never took any action.

Raju Shetti, a member of Parliament, was pursuing the case.

He went to the Enforcement Directorate and also raised this issue in Parliament.

He went to the high court too, but nothing happened.

What is the role of the Maharashtra State Co-operative Bank (MSCB) in all this?

They financed the mills that were sold. Some 30 mills were sold by the MSCB (at a cheap rate after they defaulted).

The MSCB is happy to get its money and the directors of cooperative mills are happy as they got (private ownership of) the mills.

File closed. Chapter over.

You have been fighting for so long for these cooperative mills. Did any conviction happen?

No. I have met all the people who are in power and told them to take action, but nobody has taken any action.

They don't do it because every politician owns one or more sugar mills.

Today, only 30 cooperative mills are running, but they too won't survive for long.

They are running because some old-timers are still running them.

Do you think Ajit Pawar will face any action?

No action will be taken against Ajit Pawar. I am sure.

If they take any, I will be the happiest person because I have been running around in courts for so many years over this issue.

There is evidence. It is just that action needs to be taken.

In the United Kingdom, one minister kisses his girlfriend and had to resign (referring to Matt Hancock, who had to resign as health secretary amid pressure over breach of COVID-19 restrictions by kissing a female aide), but here nothing happens to our ministers.