ED: Shiv Sena MLA Pratap Sarnaik received kickbacks for facilitating contract worth ₹175 crores
The Enforcement Directorate (ED) on Thursday alleged that Shiv Sena MLA Pratap Sarnaik has received kickbacks worth over ₹7 crores from a security service provider company named 'TOPSGRUP' for allegedly facilitating a contract worth ₹175 crores with the Mumbai Metropolitan Region Development Authority (MMRDA). The contract issued for providing security guards at MMRDA was allegedly sub-contracted to TOPSGRUP. Reports claim that Amit Chandole, the director of Vihang Advertising and a close aide of Sarnaik was arrested by last night by the ED and he allegedly used to collect ₹6 lakh every month from TOPSGRUP on behalf of Sarnaik. TOPSGRUP provides security service pan India and is founded by Rahul Nanda. Chandole is allegedly also on the board of several firms run and owned by Sarnaik and his family members. Chandole will be produced in a court today for remand. The Enforcement Directorate is investigating a money laundering case against the owners and promoters of the TOPSGRUP along with a few related parties and Sarnaik. A former Managing Director of TOPSGRUP, Ramesh Ramkrishna Iyer had registered an FIR on 28th October, alleging that TOPSGRUP has cheated MMRDA of Rs 175 crore. The case was recently transferred to the Mumbai Police Economic Offences Wing for further investigation. On Tuesday, Sarnaik had alleged that the ED’s actions against him are part of BJP's vendetta politics. “The day I moved a privilege motion against Kangana Ranaut and Arnab Goswami, and demanded reopening of the Anvay Naik case, I knew what would happen. I am a Shiv Sainik and a fighter who has reached this far. Uddhavsaheb has made me the spokesperson to put forward the party’s views. Today, they told him [Vihang] your father speaks a lot on Kangana Ranaut and Arnab Goswami. I will continue to speak wherever Mumbai, Maharashtra, or its police are maligned. I have done nothing wrong in my business,” he had said while speaking to a news channel. However, the TOPSGRUP group chairman and founder Rahul Nanda has denied all the allegations and said, “Pratap is an old friend and has not invested a single penny in my business or company ever! He or Sena has nothing to do with Tops! This is absolutely absurd.” Iyer had worked as the managing director of TOPSGRUP since 2006, said that he discovered the diversion and misappropriation of funds by Nanda in 2009. Iyer alleged in his complaint against TOPSGRUP, that in 2008, Nanda bought 51% of London-based The Shield Guarding Company Limited’s shares, for around Rs130 crore. This amount was allegedly taken from ICICI Ventures Limited and private share investors of Everstone Capital. Nanda allegedly inflated the total worth of his net assets since funds were worth four times the value of one’s net assets may be sent abroad legally. “The investment companies, despite knowing this, invested in TOPSGRUP,” said Iyer’s complaint, adding that Nanda had diverted funds from The Shield and bought properties in London. Iyer has also alleged that Nanda got loans against subsidiary companies of TOPSGRUP— including Tops Securities UK Limited and Topsgrup Holding BV in the Netherlands — and used this money to buy property in London, which is again in violation of the loan statutory rules. Nanda also did not show the income earned from these properties in his income tax returns in India, said Iyer in his complaint. Iyer also alleged that while providing the state-owned MMRDA security services, Nanda has created the department by not providing them with security personnel as decided in the contract, but is charging them with the full amount for the services. ED is also suspecting that Nanda had political help in grabbing the contract from MMRDA. Another allegation by Iyer is that Nanda made a bogus balance sheet for the financial year 2018-19 to use an overdraft and cash credit facilities from Allahabad Bank (Prabhadevi branch) and Corporate Bank (Kalina branch). For this, he allegedly changed the statutory auditors, without the approval of the concerned shareholders. Iyer also alleged that in 2017, Nanda and his family transferred 66% of their shares in TOPSGRUP to a Mauritius-based Nanda family trust, which is in violation of the Private Securities Agencies (Regulations) Act. While commenting on the ED’s action and the allegations leveled against him by Iyer, Nanda said, “The ED had questioned us about our UK acquisition in 2009 and we have given them proof that everything was done 100% legally. They also questioned me about our trust in Mauritius which again we have answered and told them that this was created legally by lawyers and that there is zero money that is in the Mauritius trust. This was all the mischief played by Ramesh (Iyer), Amar (both top executives of his companies), and the coterie, who complained to the ED and have sent them on a wild goose chase.” However, Iyer has denied Nanda’s counter-allegations by saying that his complaint was registered after due verification of facts. Interestingly, Nanda too had filed a police complaint against Iyer at the Khar police station a few months back.