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Earlier last week, the Enforcement Directorate (ED) reported that it had seized two properties in Goa belonging to Rakesh Wadhawan and Sarang Wadhawan, who are HDIL promoters. The properties are valued at over Rs 31 crore and have been linked to an investigation into money laundering that is connected to alleged irregularities in the redevelopment of Patra ‘chawl’ in Mumbai.
This money laundering case was initiated after the Mumbai Police’s Economic Offences Wing (EOW) registered an FIR against Guru Ashish Construction Pvt Ltd. And other parties. The Wadhawans were implicated in the case. The Enforcement Directorate (ED) had also apprehended Sanjay Raut, a member of Shiv Sena (Uddhav Balasaheb Thackeray), and his “close associate” Pravin Raut in connection with this case.
The case in question is related to an alleged land scam worth Rs 1,034 crore concerning the redevelopment of Patra “chawl” in Goregaon, Mumbai. The MHADA owned the 47-acre land where the chawl, home to 672 tenants, was situated, and the re-development project was to be carried out by Guru Ashish Construction Private Limited. Rakesh Kumar Wadhawan, Sarang Wadhawan, and others were said to be involved in the project.
The Enforcement Directorate (ED) stated that a tripartite agreement was signed between tenants, MHADA, and the directors of Guru Ashish Construction Pvt Ltd. As per the agreement, the developer was obligated to provide flats to the 672 tenants and construct flats for MHADA, only after which it could sell the remaining area. However, the ED alleged that the directors of Guru Ashish Constructions misled MHADA and sold the Floor Space Index (FSI) to nine developers, thereby earning a net amount of around 1.9 crore rupees without constructing the rehabilitation part for the 672 displaced tenants.
According to the ED, Guru Ashish Construction Pvt Ltd also launched a project namely ‘Meadows’ and collected the booking amount of around Rs 138 Crore from flat buyers. The total “proceeds of crime”, it alleged, generated by the directors of Guru Ashish Constructions Pvt Ltd through “illegal” activities was about Rs 1,039.79 crore. The ED found proceeds of the crime in the bank accounts of Rakesh Kumar Wadhawan and Sarang.
The funds that were diverted were transferred through the bank accounts of HDIL and its group companies, including GACPL, Sapphire Land Development Pvt Ltd, Satyam Realtors, etc. The money was then passed through multiple layers before finally reaching the personal bank accounts of the Wadhawans.
Between 2011 and 2016, around Rs 38.5 crore of the proceeds of crime from Rakesh Wadhawan’s account were used to pre-pay instalments on a loan of Rs 28.5 crore that was taken from India Bulls Housing Finance Ltd. The loan carried an interest rate of 18.5 percent and was used to acquire two plots, one measuring 1,250 square meters, and the other measuring 15,300 square meters, in North Goa. Additionally, a payment of Rs 2 crore was made to the plot seller from Sarang Wadhwan’s personal account.
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