The Enforcement Directorate has decided to probe money laundering charges and foreign exchange violations in the multi-crore Uttar Pradesh foodgrain scam.

Official sources said the the Directorate’s probe into the scam will bring under the scanner a number of officials associated with various schemes whereby grains meant for the poor were allegedly diverted to other states and sold in retail market besides making its way out of the country.

Sources said because of the magnitude of the scam, which is said to run into about Rs 35,000 crore, the ED will focus on violations of money laundering laws. Also, since it is believed that the grains made its way to neighbouring countries likeNepal and Bangladesh, the government’s apex agency for money laundering and foreign exchange violations cases, will also look into possible contraventions of Foreign Exchange Management Act (FEMA).

The Allahabad High Court in its order on December 3, had directed ED to proceed with search and seizure of assets, property, cash or kind meant for the welfare programmes being siphoned off by the officials.

The court had also sought expeditious action under the PMLA and FEMA or any other law being in force.

The CBI had on November 3, 2008 registered nine cases in connection with the scam relating to diversion of foodgrains meant for the poor.

The Mayawati government, on assuming office had recommended a CBI probe into the foodgrain scam onDecember 1, 2007. However, the CBI has now been directed by the Court to proceed with further enquiry not only with regard to Ballia, Lakhimpur and Sitapur but also with regard toVaranasi, Gonda and Lucknow districts.

The court had also directed that all those cases where the state agencies found that the foodgrains have been smuggled outside the state to other countries, they shall immediately refer such cases to the CBI for further investigation.

Earlier, after detection of a largescale bungling in supply of foodgrains under various schemes includng Antyodaya, Sampurana Gramin Swarojgar Yojna during 2002-2005, the then Samajwadi Party government had ordered a probe by the states Economic Offence Wing (EOW) in 2006.

The probe found that foodgrains meant for the poor was diverted to West Bengal from where it was smuggled toBangladesh. Besides fair price shops, many senior officers and some leading businessmen of West Bengal and even across the border were involved in the scam, sources said.

The food cell of the EOW had then lodged over 50 cases relating to foodscam in Ballia district alone, besides in other districts.

The SIT in its fact finding report has said there are evidence of the scam running in about 41 districts.