Maharashtra to amend co-op act to ensure guilty ex-bank directors face heat

MUMBAI: The Devendra Fadnavis-led BJP government will amend the Cooperative Societies Act to complete the inquiry against former directors of Maharashtra State Cooperative Bank for rampant financial irregularities and conduct a probe against the inquiry officer, additional registrar Shivaji Pahinkar, for his failure to complete the probe within the stipulated period.
Fadnavis confirmed to TOI that the law will be amended to ensure that former bank directors do not go scot-free and a probe will be initiated against the inquiry officer for his inability to complete the probe.
As per provisions of the Maharashtra Cooperative Societies Act, a probe under Section 88 against a society has to be completed within two years, and if the inquiry officer is unable to complete it, the competent authority can grant a six-month extension. The cooperation department has proposed promulgation of an ordinance to amend Section 88 so that the inquiry will not lapse on technical grounds. The probe will be conducted against Pahinkar for his failure to complete the probe within two-and-a-half years. “Two-and-a-half years is sufficient to complete the probe. We will have to examine if the probe was deliberately delayed,’’ a senior bureaucrat said.
In the wake of rampant financial irregularities, the inquiry officer had issued notices to all 44 directors, including NCP leaders Ajit Pawar and Vijaysinh Mohite Patil, Shiv Sena leader Anandrao Adsul, BJP leader Pandurang Fundkar, now agriculture minister and former minister Dilip Sopal.
On the basis of a critical report submitted by National Bank for Agriculture and Rural Development, RBI had directed the state government, then led by senior Congress leader Prithviraj Chavan to initiate stringent action against MSC Bank directors. Chavan had superseded the board of directors and had appointed senior bureaucrats as administrators. It was found that while losses stood at more than Rs775 crore, the outstanding loan was Rs1,610 crore.
On January 9, 2014, an explanation was sought from all directors, as per provisions of the Cooperative Societies Act but the cooperation commissioner found the explanation unsatisfactory. A notice under section 88 was served on all directors on October 16, 2014, and Pahinkar was appointed special inquiry officer. As per the May 22, 2014, order, Pahinkar was expected to complete the probe within three months but even after two-and-a-half years, he was unable to do so. “It’s a serious matter. There appears to be dereliction of duty,’’ the bureaucrat said.
A week ago, TOI had sought Pahinkars’s comments on the status of the probe or reasons for prolonged delay in completing it but he declined to comment.