Pravin Raut: Patra Chawl and PMC Bank, the scams under investigation

Pravin Raut, an entrepreneur, was arrested by the ED on Wednesday. He has been accused of being involved in the Patra Chawl land scam worth Rs 1,034 crore. He was arrested on charges of money laundering by a Special Prevention of Money Laundering Act (PMLA) court. He is accused of cheating the residents of Patra Chawl and Maharashtra Housing and Area Development Authority (MHADA) by selling pockets of land to private builders instead of developing them.

Guru Ashish Construction Pvt Ltd a subsidiary company of Housing Development Infrastructure Ltd (HDIL), is already accused of Rs 4,300 crore fraud at the Punjab and Maharashtra Cooperative (PMC) Bank. Reports mention that the Guru Ashish Construction Pvt Ltd was involved in the redevelopment of Patra Chawl at Goregaon that had 672 tenants in tenements on 47 acres of land belonging to Maharashtra Housing Area Development Authority (MHADA).

Parvin Raut illegally sold FSI to various builders for Rs 1,034 crore with the help of Rakesh Kumar Wadhawan and Sarang Wadhawan, Directors of Guru Ashish Constructions Pvt Ltd. This was done without constructing the rehab flats and flats to be handed over to MHADA, which was the pre-requisite.

A deal was made to construct 3000 flats – on a piece of land in Goregaon – out of which 672 were to be given to the Patra Chawl residents. In this entire deal, Pravin Raut received 95 crore rupees from Housing Development and Infrastructure Limited (HDIL), which the ED believes that this money might have come from the illegal sale of the flats. Pravin Raut on the other hand clarified to ED that the money was received after he sold HDIL shares in 2010.

In the meantime, Sarang Wadhavan along with his father Rakesh Wadhavan was sent to judicial custody and has been lodged in Arthur Road jail since October 2019 in connection with the Punjab and Maharashtra Cooperative Bank fraud case. The court remanded Sarang to police custody. During the probe, Pravin Raut’s name appeared once again because he was the former director of Guru Ashish Construction Pvt Ltd.

On February 1, the ED conducted a search operation at the house of Pravin M. Raut. His statement was also recorded under section 50 of PMLA. During the raid at Pavin Raut’s house, ED found some documents of Guruashish Constructions. The ED is probing Magpie DFS Pvt Ltd and its director Sujit Patkar, a close friend of the now arrested Pravin Raut, for the alleged fraud in the development of a plot in Goregaon in suburban Mumbai. The probe agency had searched the office and residence of Patkar as well as the premises of Raut.

Agencies suspect that a part of the proceeds of the illegal sale of the FSI may have been invested in Magpie DFS, where Sanjay Raut’s daughters Purvashi and Vidhita are directors, so far there is no official statement by the authorities on this.

Earlier in 2010, Pravin Raut had received Rs 95 crore in his bank account in the guise of sale of equity and land deal though the company was not able to complete the project and had not generated any income. The Economic Offences Wing had then first filed an FIR to probe the allegations made in the re-development of the chawl.

 Rs 95 crore amount was routed in Raut’s account from HDIL sourced by illegally availed loans from the PMC Bank. The accounts showed that HDIL had given money to Raut for acquiring land in the Palghar area. Further, as per the ledger of M/s. HDIL, the funds were given to Pravin Raut for acquiring land in the Palghar area. The investigation also revealed that Pravin Raut paid an amount of Rs 1.6 Crore to his wife Madhuri Pravin Raut from the proceeds of the crime.

Out of the said money, Madhuri Raut transferred Rs 55 lakh as an interest-free loan to Varsha Raut, who is Mr Sanjay Raut’s wife. The amount was further utilized for the purchase of a flat in Dadar East, Mumbai. The investigation further revealed that Varsha Sanjay Raut and Madhuri Pravin Raut were partners in M/s. Avani Construction. Varsha Sanjay Raut received Rs 12 lakh from this entity (as overdrawn capital converted to loan) on a contribution of a mere Rs 5,625. Varsha Raut’s statement was also recorded last year in connection with the same incident. Madhuri Raut also recorded her statement with ED. Sarang Wadhawan, the promoter of Housing Development has also recorded his statement.