The Enforcement Directorate has attached seven sugar mills in Uttar Pradesh, currently worth over ₹1,097 crore, in connection with their acquisition allegedly by former Saharanpur MLC Mohammed Iqbal and others in 2010-11 via illegitimate means.
The mills, said to be owned by Mr. Iqbal and his family members, were sold to them at throwaway prices — ₹60.28 crore — through a disinvestment process. The ED’s money-laundering case is based on the investigations conducted by the Serious Fraud Investigation Office.
In 2010-11, Namrata Marketing P Limited and Giriasho Company P Limited, the entities allegedly under the control of Mr. Iqbal and his family members, had participated in the bidding process for the disinvestment of mills of the U.P. government. They acquired the seven mills through laundering of illegitimate money using shell entities, as alleged.
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The Performance Audit Report of the Comptroller and Auditor General of India on “Sale of Sugar Mills of Uttar Pradesh State Sugar Corporation Limited” had also highlighted the administrative and financial irregularities in the disinvestment/sale process for sugar mills in Bareilly, Kushinagar, Hardoi, Deoria and Barabanki. They were acquired by the Namrata Marketing and the Giriasho Company.
The CBI has also registered an FIR to probe the sale of the sugar mills to these companies and alleged non-compliance of stipulated rules and procedures, according to the agency.
The ED has recorded the statements of key associates of Mr. Iqbal, accommodation entry operator and dummy directors of various companies.
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As it turned out, during the bidding process, the companies in question had not submitted the shareholding pattern and background of key promoters. Funds were routed allegedly via sham transactions or in the form of share application money for subscriptions at high premiums.
For the purpose of registration and execution of sale deeds, the two companies had allegedly bought seven paper entities named Ablaze Sugar Mills, Adarsha Sugar Solutions, Agile Sugar India, Eikon Sugar Mills, Majesty Sugar Solutions, Mastiff Sugar Solution and Okra Sugars Private Limited. Incorporated in 2011, these entities were treated as Special Purpose Vehicles.