Explained: Sanjay Raut’s case and ED’s money-laundering probe

The ED is investigating a money laundering probe linked to the re-development of a Mumbai chawl and other related financial transactions allegedly involving Raut’s wife and friends

Sanjay Raut
The ED arrested Sanjay Raut after seizing unaccounted cash worth Rs 11.50 lakh from his residence during day-long raid that began on Sunday

The Enforcement Directorate (ED) arrested Shiv Sena MP Sanjay Raut on Sunday midnight and later a special court on Monday sent him to four days in ED custody.

The ED arrested Sanjay Raut after seizing unaccounted cash worth Rs 11.50 lakh from his residence during a day-long raid that began on Sunday. The ED is investigating a money laundering probe linked to the re-development of a Mumbai chawl and other related financial transactions allegedly involving Raut’s wife and friends.

The agency has claimed that Pravin Raut, a close associate of Sanjay Raut, received Rs 100 crore from real estate company HDIL, and “diverted” it to various accounts of “his close associates, family member, his business entities”, including the family of Sanjay Raut.

Properties attached

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In April, the ED provisionally attached assets worth more than Rs 11.15 crore of Raut’s wife Varsha Raut and two of his associates as part of this investigation.

The attached properties are in the form of land held by Pravin M Raut, Sanjay Raut’s aide and a former director of Guru Ashish Construction Pvt Ltd, at Palghar, Saphale (town in Palghar) and Padgha (in Thane district). The attached properties also include a flat in Mumbai’s suburb Dadar held by Varsha Raut and eight plots at Kihim beach in Alibaug jointly held by Varsha Raut and Swapna Patkar, wife of Sujit Patkar, the ED said in a statement.

According to ED, Sujit Patkar is a close associate of Sanjay Raut.

Also read: Sanjay Raut sent to four days of ED custody; homemade food allowed

It is understood that the agency wants to question Sanjay Raut to know about his “business and other” links with Pravin Raut and Patkar and also about the property deals involving his wife.

In the Alibaug land deal, apart from the registered value, “cash” payments were made to the sellers, the agency had alleged.

Sanjay Raut had then termed the ED action an attack on middle class “Marathi manoos” and asserted that he will not be cowed by such moves and resist any act to put pressure on him.

Pravin Raut was arrested by the ED in February as part of money laundering probe linked to a Rs 1,034-crore alleged land scam related to the re-development of the Patra chawl in Mumbai’s Goregaon area. He is in judicial custody at present.

Allegations of realty scam

Guru Ashish Construction Pvt Ltd was involved in the re-development of the Patra chawl, which had 672 tenants in tenements on 47 acres belonging to the Maharashtra Housing Area Development Authority (MHADA), the ED had said earlier. Guru Ashish is a subsidiary company of the Housing Development Infrastructure Ltd (HDIL), which is under investigation by the ED and a few other agencies in connection with about Rs 4,300-crore alleged fraud at the Punjab and Maharashtra Cooperative (PMC) Bank.

ED said Guru Ashish had entered into a “tripartite agreement” with the tenants and MHADA to re-develop the chawl. According to the agreement, the ED said, the developer had to provide flats to 672 tenants and develop flats for MHADA. Thereafter, the remaining area was to be sold by the developer. It has been 14 years since then, and the people of the area continue to wait to get their homes.

As per the agreement, the developer had to pay rent to all 672 tenants every month till the completion of the project. However, the rent was paid only till 2014-15. The tenants then started complaining about the non-payment of rent, and the delay in the completion of the project.

Due to the non-payment of rent, delay, and irregularities by the developer, MHADA issued a termination notice to the developer on January 12, 2018. Against this notice, nine developers, who had bought FSI from GACL, filed a suit in the Bombay High Court. The redevelopment project was stalled, leaving 672 tenants in the lurch.

“The directors of Guru Ashish Constructions misled MHADA and managed to sell the FSI (floor space index) to nine developers and collected about Rs 901.79 crore without constructing the rehab portion for 672 displaced tenants and MHADA portion,” ED claims. This realty company also launched a project called Meadows and took the booking amount of around Rs 138 crore from flat buyers.

“The total proceeds of the crime generated by directors of Guru Ashish Constructions Pvt Ltd through illegal activities was about Rs 1,039.79 crore. Part of the proceeds of crime was further transferred to close associates,” it alleged.

The ED has alleged that “around Rs 100 crore were transferred from HDIL to the account of Pravin Raut”. This amount was further “diverted” by Pravin Raut to various accounts of his close associates, family member, his business entities etc, it said.

Lens on Varsha Raut

“During 2010, part of the proceeds of crime of Rs 83 lakh was received by Varsha Raut, wife of Sanjay Raut, directly/ indirectly from Madhuri Pravin Raut, wife of Pravin Raut. This amount was utilised by Varsha Raut for purchase of flat at Dadar east,” the agency alleged.

According to ED investigations, an amount of Rs 55 lakh was transferred back by Varsha Raut to Madhuri Raut. There are various other transactions too, it said.

The agency had questioned Varsha Raut last year in connection with the PMC Bank case and her purported links with Pravin Raut’s wife.

The ED probe said that Varsha Sanjay Raut and Madhuri Pravin Raut “are partners in Avani Construction and Varsha Raut has received Rs 12 lakh from this entity (as overdrawn capital converted to loan) on a contribution of mere Rs 5,625”.

The Patra chawl project

In 2020, the Maharashtra government appointed a one-member committee led by Johnny Joseph, a retired chief secretary of Maharashtra, to study and recommend solutions for the rehabilitation and rental payment to 672 tenants.

Also read: ED conducts searches in Raut’s residence

Following the recommendations of the committee and feedback from MHADA, the state cabinet, in June 2021, approved redevelopment of the Patra Chawl again, and the government resolution was issued in July 2021.

On February 22 this year the stalled construction work was restarted on the orders of chief minister Uddhav Thackeray. Now, MHADA will develop the project and give possession of flats to the 672 residents. It will also immediately complete the remaining work in 306 flats in the building, for which a lottery draw was held, before handing over the flats to the lottery winners.

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