Khichdi scam: Shiv Sena (UBT) leader Aaditya Thackeray's close aide Suraj Chavan, who was arrested by the Enforcement Directorate (ED) in a money laundering case linked to the alleged irregularities in the distribution of 'khichdi' to migrants during the pandemic period, has been sent to probe agency's custody till January 22. Chavan, who is a core committee member of the Yuva Sena, Uddhav Thackeray-led Shiv Sena's youth wing, was arrested on Wednesday evening under the Prevention of Money Laundering Act (PMLA) after he was questioned at the agency's office.
What is the 'Khichdi' scam?
According to police, the scam surfaced after alleged irregularities took place while the contracts for providing khichdi (steamed rice and pulses) to migrants during the Covid period, was awarded by the Brihanmumbai Municipal Corporation (BMC).
The Enforcement Directorate informed the court that the accused managed to secure a work order for a firm for the supply of khichdi due to his "proximity with a senior political leader".
The money laundering case stems from the first information report (FIR) of the Mumbai police's Economic Offences Wing (EOW).
The ED, represented by special public prosecutor Sunil Gonsalves, told the court that when the BMC decided to distribute khichdi to the needy people during COVID-19, work order was given to Sahyadri Refreshments, which sub-contracted it to Force One Multi Services for preparation, packaging and distribution of khichdi to the respective sites.
During the course of investigation, it came to light that due to proximity of Suraj Chavan with "senior political leader/influential persons" the work order for khichdi was awarded to Force One Multi Services by the BMC Authorities, the agency said.
No guidelines or criteria were followed while awarding the work order, it said.
The probe agency claimed that for the supply of khichdi packets, an amount of Rs 8.64 crore was transferred by the BMC into the bank account of Force One Multi Services.
Investigation conducted under the PMLA revealed that Force One Multi Services generated proceeds of crime of around Rs 3.64 crore, of which Rs 1.25 crore were diverted into the personal bank account of Chavan and proceeds of Rs 10 lakh into the bank account of his partnership firm, Fire Fighters Enterprises.
In this manner, Chavan has wrongfully acquired the proceeds of crime to the tune of Rs 1.35 crore, it said.
Key highlights of 'khichdi' scam
- The ED's investigation has revealed that "there was no role played" by Chavan in supplying khichdi.
- Accused Suraj Chavan is involved in Force One Multi Hospitality case.
- Chavan was not arrested immediately and was interrogated multiple times.
- The Assistant Municipal Commissioner said that they had given the contract to Force One Company for supplying 'khichdi' which sub-contract it to two other companies.
- Suraj Chavan refused these allegations. The contract was worth Rs 8.64 crore. A profit of Rs 3.64 crore was reported.
- The municipality was paying Rs 33 for a Khichdi packet but the accused companies were getting it for Rs 16 from smaller companies.
- Money was transferred to the accused accounts
How funds were transferred to Suraj Chavan's account?
The illegal profit generated by Force One Multi Services was distributed to the accused by showing him as an employee of the firm from financial year 2019-20 and funds were transferred to him as salary and some in the form of personal loans.
The ED claimed that to project him as an employee of the firm, two forged and backdated appointment letters were issued in the name of Chavan.
Chavan denies charges against him
On being asked about his role in influencing and contacting any BMC officer regarding allotment of work-orders of khichdi supply to Force One Multi Services, he was in denial and made evasive responses, the probe agency said.
The illegal funds acquired by the accused were used for the purchase of immovable residential and agricultural properties in his personal name, which needs further examination under the PMLA, the ED said.
The federal probe agency said the accused has played a very crucial role in the offence of money laundering.
It sought his custody for eight days, saying sustained interrogation during the custody is required to unearth the trail of funds, for corroboration and confrontation with other persons involved in the case.
Knowing politically influential person not a crime, says Chavan's counsel
Opposing the remand plea, Chavan's lawyer Harshad Bhadbhade submitted that it is not an offence to know a "politically influential person". "Is his proximity with a politician a crime?" he asked.
The ground of arrest is not justified, it is abuse of the process of law, he said, adding the accused was not concerned with Sahyadri Refreshments or Force One Multi Services.
