Printed from

Gadkari man Sancheti has Maharashtra govt link too-Milked state for irrigation Rs 2,000 crore contracts-Times of India

Shishir Arya & Ashish Roy, TNN, Dec 3, 2010, 02.40am IST
http://timesofindia.indiatimes.com/city/nagpur/Gadkari-man-Sancheti-has-Maharashtra-govt-link-too/articleshow/7032179.cms
http://timesofindia.indiatimes.com/city/nagpur/Clever-Sancheti-milked-state-for-irrigation-contracts/articleshow/7031623.cms

NAGPUR: Until now Ajay Sancheti was known to have only a BJP connection: last year Nitin Gadkari had invited him to be on the party's national executive. Documents now with TOI indicate that he may also have close links with the present Democratic Front state government comprising Congress and the Nationalist Congress Party.

Documents collected under RTI Act by Arunkumar Sampat, a contractor with Vidarbha Irrigation Development Corporation, reveal the promoters of Sancheti group used a dead company to corner more contracts by bypassing the norms. Interestingly, prominent builder Avinash Bhosale had also allegedly colluded with them in bagging multi-crore contracts.

Insiders say the fraud could be worth at least Rs 2,000 crore with the Sanchetis using fraudulent means to bag irrigation projects. The VIDC was headed by the current deputy chief minister Ajit Pawar in his capacity as the irrigation minister in the previous government.

The Sanchetis have also been in the news recently for the manner in which they bagged flats in Mumbai's Adarsh Housing Society.

Clever Sancheti milked state for irrigation contracts

Until now Ajay Sancheti was known to have only a BJP connection after being invited to be on the party's national executive by its president Nitin Gadkari last year. However, documents now with TOI indicate that he also has close links with the current Democratic Front state government which comprises the Congress and the Nationalist Congress Party.

Insiders feel that the fraud could be worth at least Rs 2,000 crore with the Sanchetis using fraudulent means to bag irrigation projects from the Vidarbha Irrigation Development Corporation (VIDC). This was being headed by the current deputy chief minister Ajit Pawar in his capacity as the irrigation minister in the previous government.

Documents collected under the RTI Act by Arunkumar Sampat, who too is a VIDC contractor, reveal that the promoters of the Sancheti group made a dead company come alive which became the means of cornering more contracts by bypassing the norms. Interestingly, Cidco scamster and prominent builder Avinash Bhosale had also colluded with them in bagging multi-crore contracts.

The Sanchetis have also been in the news recently for the piquant manner in which they bagged flats in Mumbai's Adarsh Housing Society. While one is in the name of Ajay Sancheti's driver Sudhakar Madke, a second is in the name his cousin Paramveer who is a student in the UK and the third in the name of Rajesh S Bora, brother-in-law of Abhay Sancheti who is Ajay's uncle and Paramveer's father.

Ten months after complaints of alleged corruption in VIDC were filed by the Mumbai Marathi Patrakar Sangh and Shiv Sena's Suresh Gambhir, a former MLA from Mahim in Mumbai, the state water resources department began an enquiry about two months back. It is yet to be concluded.

"An enquiry is being conducted by three chief engineers of the VIDC in the Sancheti matter," said C S Modak, the executive director of VIDC.

"It's a blatant fraud, Sancheti should be blacklisted by the VIDC," said Sampat.

The Sancheti group, which is a leading player in Vidarbha region in construction, mining and power sector, is one of the main contractors with the VIDC. The corporation rules state that no single firm can hold more than three contracts simultaneously. Though this has been in existence for at least 10 years, the VIDC recently changed the rule which was only in force to ensure that contractors can complete existing projects before starting on a new one.

In a bid to gain more contracts, the Sanchetis adopted an ingenious method. After bagging contracts in the name of Shaktikumar M Sancheti Ltd, the firm changed its name to SMS Infrastructure Ltd. If the promoters change the name of their company then the entity with the previous name ceases to exist. However, this did not happen in case of the Sanchetis.

Both companies continued to exist and bag VIDC contracts, far exceeding the upper limit of three.

On November 28, 2005, the registrar of companies issued Shaktikumar M Sancheti Ltd a fresh certificate of incorporation with SMS Infrastructure Ltd as the name. This new company continued to have the same VIDC contractor registration number - 1083. Even though the Sanchetis intimated the VIDC about the change of name in 2006, they continued to bag contracts in the old name too. A project-wise intimation has to be submitted to the corporation.

The VIDC too did not see anything wrong in both Shaktikumar M Sancheti Ltd and SMS Infrastructure Ltd, the group's current name, bagging contracts. It also issued contractor registration certificates to the former on March 14, 2007 as well as the new firm on July 23, 2007. The two firms continued to be awarded different contracts.

Ajay Sancheti, however, told TOI that there was nothing hanky-panky in the bagging of projects. "Since the work orders are issued by different executive engineers of VIDC, they took varying time to incorporate the changes," said Ajay Sancheti, who is the MD of SMS Infrastructure Ltd.

"Many a time, the engineers continued to issue cheques and other documents in the name of Shaktikumar M Sancheti Ltd even though we had changed the name of the company," he added.

A VIDC officer, preferring anonymity, told TOI that this irregularity would not have been possible without the connivance of the top brass of the corporation. "Not only did the two firms continue to bag contracts, they also formed joint ventures with different companies and bagged more contracts in the name of the JVs," the officer added.

Sanchetis formed joint ventures in the name of both Sancheti Infrastructure Limited and SMS Limited. The former tied up with Mumbai-based M/S N Thakkar Construction Private Limited and the latter with another Mumbai-based firm D Thakkar Construction Private Limited. Incidentally, a number of directors are on the board of both the Mumbai firms.

The first partnership deed between Shaktikumar M Sancheti Limited and SN Thakkar was executed on November 14, 2005 just a fortnight before it changed its name to SMS. The SMS-D. Thakkar deed is dated December 4, 2008.

However, even in 2007, when Shaktikumar M Sancheti did not exist anymore, a partnership deed was forged with SN Thakkar for taking up another VIDC contract. As per VIDC rules, a fresh joint venture has to be formed to bid for each contract.

In this manner, the Sanchetis bagged six projects in partnership with the Thakkars. One job was awarded to SMS Infrastructure on its own and another to a joint venture of Shaktikumar Sancheti Ltd and Soma Enterprise Ltd headed by Avinash Bhosale.

On this, Sancheti responded with a very vague "I don't have the details". "My director Dilip Surana is away for a couple of days," he said.

The Thakkars too have been indicted in a separate VIDC enquiry for circumventing corporation rules. The enquiry officer found that two out of four directors in SN Thakkar Construction and D Thakkar Construction - Pravin Thakkar and Jigar Thakkar - were the same. He concluded that it amounted to the same company bagging two offers. Even though the enquiry report was submitted in March this year, no action has been taken so far.

===================================================