Covid centre scam: What it is and why ED is conducting raids across Mumbai?

BJP leader Kirit Somaiya had registered a money laundering case in August 2022, claiming that contracts awarded to multiple field hospitals in Mumbai lacked healthcare experience

The Enforcement Directorate (ED) recently conducted raids at 14 locations in Mumbai and one outside the city as part of an investigation into an alleged scam involving jumbo coronavirus centers. Here is everything you need to know about the case and its development so far.

What is the coronavirus centre scam?

During the coronavirus pandemic, the Brihanmumbai Municipal Corporation (BMC) set up field hospitals in Mumbai. The BJP alleges that contracts for these hospitals were awarded at inflated rates to contractors who had connections with Shiv Sena leaders but lacked experience in the healthcare sector.

The ED's money-laundering investigation into the alleged scam is based on a case registered in August of the previous year at Azad Maidan police station by Kirit Somaiya. Later, in October 2022, the case was transferred to the Economic Offences Wing (EOW).

The estimated amount involved in the scam is Rs 38 crore according to the Mumbai police's Economic Offences Wing (EOW), while BJP leader Kirit Somaiya claims it to be an Rs 100 crore scam.

Whose premises are being searched?

As previously reported by Business Standard, the premises being searched by the ED include the residence of Suraj Chavan in Chembur, who is a close aide of Aaditya Thackeray, the son of Uddhav Thackeray, and the residence of Sujit Patkar in Santacruz, a close aide of Sanjay Raut, another leader from Shiv Sena.

Additionally, the ED is searching the premises of Sanjeev Jaiswal, an IAS officer who was an additional municipal commissioner of the Brihanmumbai Municipal Corporation. Lifeline Hospital Management Services in Sasmira Marg, Worli, as well as the suppliers, contractors, and middlemen, are also being investigated for their respective involvement in the alleged scam.

Who is named in the case and what are the allegations?

The first information report (FIR) filed on August 24, 2022, mentioned Lifeline Hospital Management Services and its partners, including Sujit Mukund Patkar, Dr Hemant Ramsharan Gupta, Sanjay Madanlal Shah, and Raju Nandkumar Salunkhe. The EOW obtained contract and payment details related to Lifeline Hospital Management Services, which was responsible for setting up jumbo Covid centers during the pandemic.

According to Kirit Somaiya's police complaint, the accused firm obtained the contract through forged documents, which include their partnership deed. He also claims that the firm concealed the fact that it had been blacklisted by the Pune Metropolitan Region Development Authority for providing medical services.

The probe, by the BMC, focused on finding irregularities in contracts that were awarded for healthcare services and staff. The EOW is investigating the criminal aspects of the alleged scam, while the ED is tracing the money trail of the proceeds from the alleged crime.

Who has been arrested so far?

The EOW has arrested two individuals: Raju Nandakumar Salunke, also known as Rajiv, and Bala Ramchandra Kadam, also known as Sunil. During the investigation, it was discovered that around Rs 82 lakh was transferred from the bank account of Salunkhe (one of the partners in Lifeline Hospital Management Services) to Kadam's account.

According to the Indian Express (IE), amounts of Rs 87.31 lakh and Rs 45 lakh were transferred from the company's bank account to Kadam's account. When questioned about these transactions, Kadam failed to provide supporting documents. Furthermore, when asked about the Rs 45 lakh transaction, he claimed it was used for office rent but the landlord stated that no payment was received.

Who else has been questioned?

The EOW has interviewed several BMC officials, including municipal commissioner IS Chahal and joint municipal commissioner (improvement) Ramesh Pawar, according to the IE report. Pawar was questioned about the circumstances, under which the Patkar-led company was allowed to participate in the tendering process despite lacking healthcare experience. However, Pawar is not considered a suspect in the case.