Banaskantha BJP leader accuses prohibition officials of ₹1,000 crore molasses scam

A senior BJP leader has alleged a massive scam involving molasses trade in Gujarat, claiming it has caused losses of over ₹1,000 crore in government revenue. Mahesh Dave, a former sarpanch of Jasra village and an organisational leader of the BJP in Banaskantha, accused Ketan Desai, Deputy Director of Prohibition, of colluding with traders and other officials to issue illegal trade licences.

At a press conference in Palanpur, Dave alleged that Desai and senior officials manipulated the licensing process to favour select companies trading in molasses—a key byproduct of sugar production—between 2018 and 2025.

“Molasses was transported from Amirgadh to Kandla and exported, both domestically and internationally, in violation of licensing norms,” Dave said.

Licensing violations under scrutiny

According to Dave, the alleged scam centres on misuse of the Mumbai Molasses Rules, 1955, which govern trade and storage of molasses. Companies from Punjab, Haryana, Uttar Pradesh, Uttarakhand, and other states were reportedly granted M-4 and M-5 licenses without possessing the mandatory M-3 license—an essential prerequisite under the rules.

“The M-3 licence is required to store and trade in molasses. Only after securing this can a trader apply for M-4 or M-5 licences for inter-state transport or export,” Dave said, adding that the bypassing of this requirement not only violated regulations but also enabled large-scale tax evasion.

He further claimed that this pattern of unauthorised licensing resulted in significant financial losses for the state exchequer.

List of companies named in allegation

Dave released a list of firms that allegedly received licences despite not meeting eligibility criteria:

Indian Sugar Exim Corporation Ltd, New Delhi

KN Resources Pvt Ltd, Churchgate, Mumbai

Encircle Exim LLP, Hyderabad, Telangana

Anant Trafina Pvt Ltd, Raipur, Chhattisgarh

Zunzunwala Export Pvt Ltd, Varanasi, Uttar Pradesh

Moscow International Commodities Pvt. Ltd, Gandhidham, Kutch

Integrateds Vasiss Pvt Ltd, Ahmedabad, Gujarat

Official response

When contacted by phone, Ketan Desai confirmed that an internal probe is underway.

“The matter is under departmental investigation. It would not be appropriate for me to comment at this stage,” he said.

Background: what is molasses and why it matters

Molasses is a thick, dark syrup obtained during sugar refining. It is widely used in industries ranging from confectionery and distilleries to animal feed and ethanol production. Given its commercial value, molasses trade is strictly regulated to prevent misuse—especially in dry states like Gujarat, where molasses can be diverted to illicit alcohol production.

The state government has not issued an official statement on the matter. It remains to be seen whether an external investigation or legislative inquiry will follow.