Mumbai: Investigating agencies trying to make charges of laundering $8.04 billion (Rs37,546.8 crore) stick against Pune-based stud farm owner and real estate consultant Hasan Ali Khan say they have uncovered a money trail linked to him, according to two people familiar with the development.
The revenue department has found two transactions carried out by Khan in 2006 from his account in Bank Sarasin and Co. Ltd in Switzerland to a finance company in the UK.
Khan, who is free on bail in a case relating to multiple passports even as he battles laundering and tax-evasion charges, could not be reached for comment. His chartered accountant said on Friday that Khan would not be available to answer questions.
Charged with violating foreign exchange laws and tax evasion, Khan has been under the scanner of the enforcement directorate (ED) and the income-tax department since 2007. However, the investigations had thus far been limited to Khan’s account in UBS AG, Zurich.
Investigators are also examining whether there are any links between a $500 million investment by Khan and the financing of terrorist activities. This probe will be conducted by a three-member panel headed by Samir Bajaj, Mumbai ED deputy director, Rajiv Nabar, commissioner of income tax (appeal) and Sanjay Saxena, additional commissioner of police (economic offences wing) in Mumbai.
The panel will investigate Khan’s association with the former Saudi arms dealer Adnan Khashoggi and suggest ways of expediting the collection of information from Swiss authorities.
ED’s findings included Khan’s plan to finance a $500 million project of Khashoggi that was contained in a notarized document signed by him on 29 June 2003 in London. A notarized document is certified by a licensed public officer who serves as an impartial witness and establishes the authenticity of the signatures.
The two transfers of $1.6 billion and $7 million that are said to have come to light recently were carried out in November 2006 through correspondent banking, an arrangement where one bank makes or receives payments on behalf of another.
The money was transferred from Bank Sarasin to a US branch of Citibank NA, then to Barclays Plc in the UK and finally deposited in a firm in the UK. ED is now conducting fresh inquiries into the matter.
Khan has challenged the tax authority’s demand for unpaid taxes in the income tax appellate tribunal. The case will come up for hearing on 21 July. In May, Khan appeared before ED officials in Mumbai for adjudication proceedings initiated by the department.
Earlier this year, the I-T department obtained a letter rogatory to probe Khan’s Swiss bank accounts.
A letter rogatory is a formal order along with a court request to a competent authority in another country to help Indian authorities in investigations.
ED had issued a show-cause notice to Khan in 2008 for foreign exchange violations regarding the $8.04 billion in his UBS account. The income-tax department in Mumbai also issued a notice and raised a demand of Rs40,000 crore against Khan for not disclosing funds in several foreign bank accounts, including the one in UBS. That amount has been raised to Rs50,000 crore, owing to charges because of non-payment.
According to ED’s investigation report, Khan wrote “a private and confidential letter to Prabhu Guptara, director organizational development at Wolfsberg Executive Development Centre, Switzerland—a subsidiary of UBS—and asked for assistance in clearing up a situation” after UBS froze an account belonging to Khan, following a $300 million transfer from Khashoggi, labelling it as “funds from weapon sales”.
The report was silent on the exact nature of the Khashoggi venture in which Khan was expected to invest or how he met the arms dealer.
The I-T department first raided Khan’s residence at Koregaon Park in Pune in January 2007 and seized documents that revealed his $8.04 billion UBS account in Zurich. The department said Khan concealed his income and had not filed income-tax returns since 1999. The department also raided his properties in Mumbai and Hyderabad.