Raut, 60, was arrested after over six hours of questioning at the ED’s zonal office in south Mumbai’s Ballard Estate.

The Rajya Sabha MP of the Sena, led by former Maharashtra chief minister Uddhav Thackeray, was produced before a special PMLA court in Mumbai later in the day, where the ED sought his custody.?The session court sent Raut to ED custody till August 4 but the ED?had sought eight days' custody.

The ED probe pertains to alleged financial irregularities in the redevelopment of Patra ‘chawl’ and?related financial property transactions involving his wife and alleged associates.

What is the Patra Chawl scam?

Siddharth Nagar, popularly known as Patra Chawl is an area located in Goregaon, a northern Mumbai suburb. It housed nearly 672 homes spread over 47 acres of land.?

In 2008, the?Maharashtra Housing and Development Authority (MHDA) handed over the project of redeveloping the Chawl to?Guru Ashish Construction Private Limited (GACPL), a sister company of?HDIL (Housing Development and Infrastructure Ltd).

GACPL was supposed to build 672 flats for the people there and develop flats for MHDA and sell the remaining land to private developers for GACPL's own development works.?

However, it has been 14 years since then that the tenant of Patra Chawl awaits their flats.?

The company did not redevelop the Patra Chawl or any other flats that had to be handed over to MHADA and sold land parcels and the Floor Space Index (FSI) to other builders?for Rs 1,034 crores. It launched its own project called the Meadows and took a booking amount of Rs?Rs 138 crore from flat buyers.

The ED reportedly claims that?Pravin Raut, a close associate of Sanjay Raut, and other directors of Guru Ashish Constructions misled MHADA misled the Maharastra government and sold the FSI to other developers for Rs 901.79 crore and never completed the project they were handed.?

Pravin Raut, now arrested by ED, was one of the directors of the firm along with Sarang and Rakesh Wadhawan of HDIL, who were the prime accused in the PMC bank scam case.

The MHADA filed an FIR against GACPL in 2018. In February 2020, Pravin was arrested by the Economic Offences Wing (EOW) and Sarang was arrested in September. However, Pravin was later released on bail.?

The ED has now arrested Sanjay Rait in connection to the scam.?

Probing the matter, the ED has now claimed that Pravin Raut received Rs 100 crore from HDIL through the illegal sale?and “diverted” it to various accounts of “his close associates, family member, his business entities”, including the family of Sanjay Raut.

As per the probe, GACPL was supposed to pay rent to the 672 tenants until the completion of the project. However, rent was paid only till 2014-15. Eventually, when complaints against the construction company started to come in, the Maharashtra government issued a termination notice to the developer on January 12, 2018.?

Meanwhile, the developers, who bought the land and FSI from GACPL, filed a suit in the Bombay High Court. The entire project got stalled while the tenants still await their houses.?