A local Mumbai court on Tuesday remanded the senior Nationalist Congress Party leader and former Maharashtra Public Works Department Minister Chhagan Bhujbal in the custody of Enforcement Directorate till March 17, a day after he was arrested in a money laundering case in connection with the Maharashtra Sadan scam.
Bhujbal, who broke down in the court at one point while speaking, said he was innocent.
"I have cooperated (with ED). I have been in social service for the past fifty years. When some questions were put to me (by ED), I honestly said I did not know but still I was arrested," he said.
He said that he did not grant the contract in question (Maharashtra Sadan guesthouse in Delhi) and only followed the directions of the then Chief Minister (the late) Vilasrao Deshmukh to attend meetings (related to the project), he added.
"CM Vilasrao Deshmukh told me to hold meetings and I followed that. I did not grant contract," he said.
Some disgruntled employees of the Mumbai Education Trust, a trust run by him, cooked up the allegations, he claimed.
The ED said in the remand application that contractor of Maharashtra Sadan project, K S Chamankar Enterprises, paid Rs 6.03 crore to Origin Infrastructure, a firm controlled by Bhujbals.
Prime Builders and Developers to whom Chamankar sub-contracted the Maharashtra Sadan project, also "paid Rs 18.5 crore through their associates against dubious real estate deals", it said.
"In view of evidence and money trail available so far.. there are reasons to believe that Bhujbal is guilty of the offence of money laundering," it said.
The fund transfer from Prime Builders to the firms controlled by the Bhujbal family was nothing but quid pro quo for awarding Chamankars the Maharashtra Sadan project, it said, adding that Bhujbal, a cabinet minister in the then (Congress-NCP) government, was apparently the prime mover in awarding of the work.
A former employee of the MET, Amit Balraj, said that he had seen huge leather bags containing cash being brought to the ninth floor of the MET office in Mumbai and the notes being counted by counting machines and kept at the cash-room at the MET office.
The notes used to be of Rs 1,000 denomination with each bag containing approximately Rs 1 crore, the ED said.
Balraj also heard Sameer Bhujbal (Bhujbal's nephew, already arrested) instructing his associates about some persons bringing cash to the MET building but Chhagan Bhujbal, when asked about such cash transactions, denied any knowledge, the ED said.
"Balraj may also be confronted with Bhujbal to find the correct facts," said the ED, adding that it did not appear reasonable that Bhujbal was unaware of these cash transactions or had not approved them as he was the chairman of the MET.
These proceeds of crime, generated through "criminal activities of Chhagan Bhujbal" were further laundered through companies of Sameer and Pankaj Bhujbal as well as other Bhujbal-controlled companies in which the employees of the MET were 'dummy directors', the remand plea said. Some of these companies existed only on paper, it said.
The former minister didn't cooperate with the ED and maintained "deliberate silence" about the modus operandi to favour Chamankar Enterprises and especially the origin of cash which was circuitously routed through hawala operators back to companies controlled by Pankaj, his son, the ED said.
The Directors of Origin Infrastructure and Niche Infrastructure told the ED that they were only dummy directors installed by Bhujbals, it said.
Bhujbal's present residence, `Solitaire' building in suburban Mumbai, "itself is prima facie proceeds of crime and has been attached", and this made his role in money-laundering obvious," the ED said.
The documents obtained from individuals/firms, statements of bank accounts, etc., show generation of huge "illicit funds" and laundering by Bhujbal family, ED's remand plea said.
The chartered accountant of Bhujbal group and "market operators" told investigators that shares of Parvesh Constructions and Armstrong Energy (both owned by Bhujbals) were sold to "dubious" entities for cash at "unrealistic high premiums" of Rs 9,900 per share and Rs 125 crore were channelled by this method. The cash was handed over to the operators at the office of the Mumbai Educational Trust.
Bhujbals were also paid through "phony" real estate transactions from 2006 onwards, the ED said.
The remand plea listed names of twelve persons, all the MET employees, who are Directors of the companies controlled by Bhujbals, and said that these persons said they were "only signatory Directors" and signed the documents at the instance of the Bhujbal family.
ED's counsel Hiten Venegaonkar also told the court that Bhujbal, as Deputy Chief Minister, held certain meetings though he was not holding the relevant portfolio.
Bhujbal's lawyers R B Mokashi and Prasad Dhakephalkar said as he had appeared before the ED whenever summoned, so his arrest was unnecessary.
But the court granted the remand plea.
