Mumbai: A Mumbai court on Friday dismissed the Enforcement Directorate’s (ED) plea for custody of Pune-based stud farm owner and real estate consultant Hasan Ali Khan, who was arrested on alleged money laundering charges.
After a three-day-long courtroom drama, M.L. Tahilyani, special judge of the sessions court, said the investigative agency has not been able to establish the offence committed by Khan under the Prevention of Money Laundering Act (PMLA).
“I have come to the conclusion that the investigative agency has not been able to demonstrate prima facie that any schedule offence has been committed by the accused (Khan) and, therefore, the question of custody does not arise,” Tahilyani said.
Khan has been granted bail on surety of Rs80,000 on condition that he will not leave Mumbai for the next five days and will appear before ED every day for three hours for questioning.
Rajeev Awasthi, senior counsel of ED, said: “We will proceed forward with whatever remedies available under the law. We are trying to understand the order and considering to file an appeal before the high court.”
“The court has decided that there is no case against Khan under PMLA and has, therefore, rejected the ED remand application,” said I.A Bagaria, Khan’s lawyer.
Tahilyani in his order said the documents presented by ED against Khan were all photocopies of information provided to the investigative agency by Mahesh Tapuriah, nephew of Khan’s alleged business associate Kashinath Tapuriah, and ED had made no attempt to check the “genuineness” of the documents.
“It was not disclosed to me why original documents were not supplied and where are these original documents,” said Tahilyani.
Khan, 59, a real estate consultant and owner of race horses, was arrested on Monday midnight under PMLA after searches at his premises in Pune and Mumbai, and sustained interrogation.
He is alleged to have stashed more than $8 billion (around Rs36,000 crore) in Swiss banks, besides having links to international arms dealer Adnan Khashoggi.
Khan is also facing charges of tax evasion of at least Rs40,000 crore.
Taking note of reports of Khan’s alleged links with arms dealers and people associated with terror activities, the Supreme Court had on Tuesday asked the Centre to consider whether he could be booked under anti-terror law.
The court had suggested invoking of anti-terror laws such as the Unlawful Activities (Prevention) Act and other stringent provisions of the Indian Penal Code owing to Khan’s alleged links with various arms dealers, including Khashoggi, and terror-related activities that could put national security at risk.
On Thursday, ED had submitted certain confidential documents against Khan before the court in a sealed envelope. The documents submitted by ED consisted of a notarized document of Khan on 29 June 2003 in London—“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 Saudi arms dealer Adnan Khashoggi, labelling it as ‘funds from weapon sales’”.
Tahilyani, after going through the documents, said: “These documents are freely available on Wikipedia (and), therefore, my view is that these documents cannot be considered as confidential.”
In his order, Tahilyani also said ED was not able to establish that the Swiss bank accounts of Khan and the cross-border transactions of Khan were from “proceeds of crime”.
He also observed that UBS AG Zurich, through the Swiss government, had denied existence of Khan’s $8 billion account in a letter addressed to ED and the Reserve Bank of India. “If one goes by the communication sent through UBS, it is difficult to say that the documents with ED are genuine,” Tahilyani said.
The court noted that Khan had opened three accounts in UBS. However, two of these three accounts had zero balance and were closed soon after as UBS was not sure of the credentials of Khan and did not want to entertain his request.
The third account was held by Khan’s wife and had a very small balance.