The Investigative Wing of the Income Tax (IT) Department carried out searches at premises linked to Shiv Sena leader Yeshwant Jadhav and his wife, MK Yamini Jadhav, on Friday morning. Yeshwant Jadha is also Chairman of the Standing Committee of Brihanmumbai Municipal Corporation (BMC).
Searches were also carried out at the residences of close associates of Jadhav and some BMC contractors.
Jadhav is one of the strongest Shiv Sena leaders in BMC. As Chair of the Standing Committee, he gives final approval to major financial proposals submitted to the BMC. It has been under the scanner of the Department of Income Taxes (IT) since 2019.
Earlier, the IT department wrote to the Election Commission of India for the disqualification of MP Yamini Jadhav due to discrepancies in the electoral affidavit filed by her in the 2019 national elections.
During an investigation last year, the income tax department discovered anomalies related to certain transactions with a Kolkata-based front company.
This company was allegedly used to launder money to the tune of Rs 15 crore to Yamini Yashwant Jadhav, her husband Yashwant Jadhav and other family members.
The findings were highlighted by the IT department after India’s Election Commission demanded verification of election affidavits as part of standard operating procedure.
What the IT department found
The IT department said the candidate, according to the affidavit, had an unsecured loan including one from Pradhan Dealers Pvt Ltd of Rs 1 crore.
The department said Pradhan Dealers was a front company run and controlled from Kolkata by entry operators.
According to the investigation conducted by the IT department, the shareholder companies of the Pradhan Dealers company are two Kolkata-based companies – Skylink Commercial Ltd and Supersoft Suppliers Ltd.
Chandrashekhar Rane, Krishna Bhanwarilal Todi and Dhiraj Chawdhary are appointed directors of these companies.
While investigating and verifying said company, the IT department learned that Pradhan Dealers was a front company. The information was extracted from the database of shell companies developed by the department of Kolkata.
The investigation further showed that the three administrators were working under the influence of a certain Uday Shankar Mahawar, a Kolkata-based entrance operator.
The network
Uday Shankar Mahawar is the same entry operator whose name appeared in the National Herald case.
Upon investigation, Mahawar admitted that he was actively involved in providing hosting entries through several shell companies.
The Mumbai IT department had recorded the statement from Chandrashekhar Rane, one of the current directors of Pradhan Dealers Pvt Ltd, and Priyesh Jain, one of the company’s former directors.
Rane and Jain, in their statement, admitted to being fictitious directors of said company. They said the control and management of the company belonged to Uday Shankar Mahawar.
Unsecured Loans
Meanwhile, Mahawar admitted that the process of transferring the said company to Yashwant Jadhav started in FY 2018-19 (December 18, 2018) and was completed in FY 2019-20 (1st January 2020).
Advancement of accommodation of inflows of unsecured loans to Yashwant Jadhav’s family members and parties known to him totaling Rs 15 crore in total, including amounts received after the date of the affidavit, has was carried out during the 2019-20 financial year.
The unsecured accommodation loans were issued by said company in lieu of cash, as stated by company directors, the IT department said.
During this process, the money received from the Jadhav family was laundered by Uday Shankar Mahawar, the operator, through many layers and brought back into the books of Pradhan Dealers Pvt Ltd, he said.
The company was then used to pass on the unsecured loans to Yashwant Jadhav’s family members and parties he knew, the IT department said.
Out of Rs 15 crore, at the stage of filing the affidavit, Yamini Yashwant Jadhav had received a sum of Rs 1 crore in the form of an unsecured loan for accommodation which was arranged by Pradhan Dealers Pvt Ltd.
The IT department said it could be inferred that this sum of Rs 1 crore was not in the nature of a loan taken out by Yamini Yashwant, but was his own money.
Moreover, the details of liability as such disclosed in the affidavit filed by her were erroneous.
key witness
Chandrakant Rane told IT: “I don’t know the shareholder of the company. I can say that Krishna Bhanwarilal Todi and I are the namesake directors of the company.”
“The company is owned by Uday Shankar Mahawar from Kolkata and Priyesh Jain from Mumbai. All decisions and transactions that are done in the company have been made at the behest of Uday Shankar Mahawar till March 2020 and later business of company were taken over by Priyesh Jain,” Chandrakant Rane said.
“As far as I know, Nikhil Jadhav and Yatin Jadhav, people known to Priyesh Jain, were going to be the directors of the company. But I still hold the position of director of the company,” Chandrakant Rane said.
Chandrakant Rane, while setting out the business and modus operandi of the company and its controllers, said that the companies, on their face, are engaged in the business of providing accommodation inflows of loans or advances unsecured to various entities, in lieu of a cash commission.
“This business activity is controlled and managed from Kolkata by Uday Shankar Mahawar and a Priyesh Jain from Mumbai. There is no real activity in these businesses,” he said.
“Comptroller and director of the company, Uday Shankar Mahawar, opened bank accounts in these companies and put his signatures on the blank checkbooks,” he said.
The companies facilitate the granting of unsecured loans and advances for accommodation to various entities in lieu of cash received from them.
“Raised huge fake social capital”
During the investigation, IT department officials learned that Mahawar had set up shell company Pradhan Dealers 2011-12 and raised huge fictitious share capital there to provide all hosting entries. Later, he sold this business to the Jadhav family.
Mahawar in his statement to the IT department said that he used to set up companies and raise fake capital in those companies. He would then sell these companies for a commission.
Priyesh Jain said the promoter of Pradhan Dealers had raised the Rs 15 crore share capital in the company by issuing shares at a high premium to the various other companies, most of which were also shell companies.
how the money flowed
One of these companies, Astvinayak Traders PVT Ltd, is controlled by Uday Shankar Mahawar and six other companies are front companies he knows of with no real business activity.
It had been used only to increase the share capital of Pradhan Dealers. He created a shell worth Rs 15 crore to be laundered later for potential beneficiaries.
Later, when the beneficiary – Jadhav Group – contacted unaccounted cash of Rs 15 crore, it was laundered through Pradhan Dealers after being routed through various layers and accounts of that company.
It is the usual modus operandi of raising capital in a company by allocating shares with an extraordinarily high premium to companies with no financial value.
Rane also said that control of the business was given by Priyesh Jain to Yatin Jadhav and Nikhil Jadhav – the two sons of Yamini Jadhav and Yeshwant Jadhav.
Priyesh Jain has also confirmed the sale of shell company Pradhan Dealers to Yeshwant Jadhav. Jadhav then used the money from this road firm by accepting various unsecured loans in lieu of cash given to the promoters of the Uday Shankar Mahawar company.
By this, the entire capital of the company which was around Rs 15 crore was transferred to entities and companies controlled by Yeshwant Jadhav.
Here are the details of the assets as mentioned in the affidavit filed by Shiv Sena MLA Yamini Jadhav in 2019 (Total Gross Market Value):
Real Estate (Self): Rs4,72,50,000
Movable property (own): Rs.2,74,20,096
Yashwant Kamlakar Jadhav (Applicant’s spouse, Yamini Jadhav)
Real estate : Rs 2,89,50,000
Movable property : Rs 1,72,67,498
BMC elections are due to take place this year.
