The Enforcement Directorate (ED) has attached seven sugar mills worth over Rs 1,097 crore in a money laundering case against former Uttar Pradesh Bahujan Samaj Party MLC Mohammed Iqbal and his family, officials said on Tuesday.
They said the Lucknow zonal office of the central probe agency has issued a provisional attachment order under the Prevention of Money Laundering Act (PMLA).
These mills are 'owned' by Iqbal and are located in Kushinagar, Bareilly, Deoria, Hardoi and Barabanki districts of the central Indian state and the total valuation of the land and other infrastructure is Rs 10,97,18,10,250, the officials said.
"These mills were sold to Mohd. Iqbal and his family members at a throwaway price of only Rs 60.28 crore through disinvestment/sale process in year 2010-11," the agency said.
During that period, Uttar Pradesh was ruled by the BSP government, headed by chief minister Mayawati.
The ED alleged these mills were purchased in the name of shell companies like Namrata Marketing P Ltd and Giriasho Company P Ltd that were under the 'control' of Iqbal and his family members.
These shell or dummy firms, it is alleged, further floated seven 'paper companies for registration and execution of sale deeds' of these mills and they were termed 'special purpose vehicles (SPVs)'.
The ED claimed these 7 companies were incorporated on the same date in 2011.
These mills were acquired by the accused 'through laundering of illegitimate money through various shell companies having dummy directors and sham transactions', the agency alleged.
ED Joint Director (Lucknow) Rajeshwar Singh said the probe in the case is 'continuing and the role of some other people is being investigated'.
The agency had carried out raids at the premises of the former legislator based in Saharanpur, in October last year.
It had filed a money-laundering case against Iqbal and others after taking cognisance of a criminal complaint filed by the Serious Fraud Investigation Office (SFIO) and cases registered by the Central Bureau of Investigation (CBI) in connection with illegal sand-mining and sale of sugar mills.
The Supreme Court had in 2016 directed the CBI to conduct a probe against Iqbal after a public interest litigation (PIL) was filed before it, alleging that the former legislator was indulging in corruption and money laundering.
The agency said an audit carried out by the Comptroller and Auditor General (CAG) into the sale of these mills had 'highlighted the administrative and financial discrepancies and irregularities in disinvestment'.
It said the probe found that the two alleged shell companies 'participated in the bidding process of sugar mills of Uttar Pradesh Rajya Chini Evam Ganna Vikas Nigam Limited (UPRCGVNL)'.
'The companies did not submit the shareholding pattern and the background of key promoters which were the stipulated conditions at the time of bidding,' the ED alleged.
It was 'noticed during investigation that the funds were infused either into these companies through cash deposits made in the bank accounts of shell companies and further routed into these two companies through sham transactions or there was infusion of funds disguised in the form of share application money for subscription to shares of these two companies at high premium'.
