The Economic Offences Wing, Mumbai, has submitted to the Girgaum metropolitan magistrate's court that Gholap and his wife were recipients of Rs 40 lakh in kickbacks in what is known as the Awami Bank scam.

The minister has denied these charges, terming them ``baseless'', but the stated case of the prosecution and the string of complaints by individuals in the Awami Bank case raise several questions which remain unanswered by Gholap. The case so far:

The Ministry of Social Welfare, which is headed by Gholap, has under its purview several corporations whose primary function is to disburse funds to the weaker sections of society through sundry employment generation schemes. These corporations get their money from the Central and State Governments.

But in case, as often happens, sufficientbeneficiaries are not mobilised, the corporations have been instructed to put this money in short-term deposits with any nationalised bank, or one which has a net worth of Rs 100 crore.

On February 18, 1998, the Lokshahir Annabhau Sathe Development Corporation issued a cheque of Rs 2 crore to the Awami Mercantile Cooperative Bank for a deposit. This was in violation of the government resolution about depositing money with either a nationalised bank or a bank whose net worth is Rs 100 crore and above. The Awami Bank had been put under a Reserve Bank of India moratorium since 1995, which means effectively that the bank is on its way to liquidation and can neither accept deposits nor give advances, or create fresh liabilities.

The main players in this scam are Subodh Kadam, a small-time politician who wrangled his way into Awami Bank as a co-administrator in 1997, Vithal Kapuskar, a builder looking for capital to fund his projects in Kurla, Vijay Mehta, a finance broker and a close friend of Gholap and AnilPagare, personal assistant to the minister.

For his new building projects, Kapuskar needed fresh capital but was sure that most banks would ask him to arrange for deposits in lieu of the loan. So, Kapuskar got in touch with Kadam, a friend and co-administrator of the Awami Bank. Kapuskar, meanwhile, also knew Vijay D Mehta, a finance broker and friend of the minister who told him that the corporations under the Ministry of Social Welfare often have surplus funds and that these funds have to be put in a bank on short-term deposits.

But as the Awami Bank was under a moratorium and any fresh funds would have come under RBI scrutiny, it was decided that Awami Bank would open an account with the Sangli Bank where Kapuskar already had an account (It is legally permissible for a bank to open an account with another bank). Then Kadam, alongwith two other officials of the Awami Bank, Abdul Rahim Mukri and K A F Amin, allegedly forged a resolution of the chairman of the Awami bank for opening the account withSangli Bank.

It is in this new account that the Lokshahir Annabhau Sathe Development Corporation deposited Rs 2 crore in February 1998. Another deposit of Rs 2 crore was received in this account from the Vasantrao Naik VJNT Corpn on March 20, 1998.

Sometime in April 1998, the Awami Bank administrator D B Patil, who had so far been oblivious to the goings on in his bank, received an anonymous telephone call alerting him to the Sangli Bank account. Patil immediately asked the Sangli Bank to close the Awami Bank account since it was illegal. But before this, Rs 3.40 crore had already been siphoned out by Kapuskar as loans.

But even as this came to light, the Mahatma Phule Backward Class Development Corporation decided to deposit another Rs 1 crore. But as the Awami Bank's account in Sangli Bank was frozen, using the same forged resolution, Kadam and company opened an account in Global Trust Bank (GTB). At the last minute, the Global Trust Bank was tipped off by someone and developed cold feet. Theyreturned the Rs 1 crore by a pay order.

Then started the merry-go-round. The Rs 1 crore deposit went to Development Credit Bank, Dahisar and finally to Bank of Punjab Limited, a private Bank.

While the Annabhau Sathe Corporation and Vasantrao Naik Corporation were chasing their money, Anil Pagare gave a letter to the managing director of the Mahatma Phule Corporation, M N Kamble, on August 6, 1998 under his signature, citing instructions by the minister to renew the deposit of Rs 1 crore of Mahatma Phule Corporation to Awami Bank for another 180 days and to further deposit another Rs 3 crore. Over the weekend that followed, Kamble also received a call from the minister asking if the orders had been carried out. Though he replied in the affirmative, Kamble did some cross-checking and on the following Monday, gave stop payment instructions to the Andhra Bank in which the Phule Corporation had its account.

But the extent of the scam was unearthed when Uttam Khobragade, director, social welfare andex-officio director of all corporations, got wind of the goings-on. He wrote to the chief secretary, who in turn ordered the Mumbai collector to investigate. The collector's report was then converted into a first information report by the Crime Branch, EOW.

Of the Rs 5 crore deposited in the Awami Bank account, Rs 3.40 crore was given to Kapuskar as loan of which he gave Rs 1 crore to Kadam. At present, the police is trying to recover this Rs 1 crore from Kadam. Of the remaining Rs 1.60 crore, only Annabhau Sathe Corporation could retrieve Rs 50 lakh; Rs 60 lakhs were frozen in the Awami Bank's account in Sangli Bank. The remaining half-a-crore is, suspectedly, the money paid in kickbacks.

Part-II: Who received the kickbacks and how much