New Delhi: The National Investigation Agency (NIA) on Tuesday arrested Hizbul Mujahideen (HM) chief Syed Salahuddin’s son Syed Shahid Yousuf, as it seeks to smash terror funding modules in Kashmir.

Yousuf was arrested in connection with a 2011 terror funding case. Following his arrest, the NIA said he would be presented before an NIA special court and remanded to police custody for interrogation.

“Yousuf has been receiving and collecting funds over the years through international wire money transfers through Aijaz Ahmad Bhat, a member of the HM," the NIA said in a statement.

Yousuf, 42, who has been serving as a village agriculture extension assistant (Budgam) in the Jammu and Kashmir department of agriculture, has been accused of being in touch with overseas financiers who would, on the telephone, inform him of money transfer codes.

“The NIA has already filed two chargesheets against six accused persons in this case in 2011. Out of these six chargesheeted accused, four including Ghulam Ahmad Bhat, close associate of Syed Ali (Shah) Geelani, chairman (of) Tahreek-e-Hurriyat, are in judicial custody and facing trial in the special court, NIA, New Delhi. The other two, namely Mohammad Maqbool Pandit and Aijaz Ahmad Bhat, are still absconding," the NIA’s statement added.

The arrest came just a day after the centre appointed former Intelligence Bureau (IB) chief Dineshwar Sharma as its “special representative" in Kashmir to work for a peaceful solution to the Kashmir issue. The move was opposed by Hurriyat leaders on Tuesday.

In July, the NIA arrested seven separatist leaders, who were then remanded to 10 days’ police custody for their alleged involvement in terror funding. They included Hurriyat’s hardline leader Syed Ali Shah Geelani’s son-in-law Altaf Shah.

“One of the main sources of funds is invoicing fraud during trade deals. If a retailer in another state says that he is buying dry fruits from Kashmir worth Rs25 lakh, he actually pays the wholesaler in Kashmir Rs1 crore, while the invoice reflects the former amount. The remaining Rs75 lakh is then released in very small instalments of Rs1.5-2 lakh to fund (protesting) stone pelters," a senior intelligence officer from Kashmir said on condition of anonymity.

While the separatists are under the scanner on suspicion of receiving funds from the Lashkar-e-Taiba to carry out subversive activities in Kashmir, the hawala money laundering network is also used to fund home-grown militants.

“A significant portion of these funds are also used to sustain home-grown terrorists. This money is used to finance their food, provisions, upkeep and other expenses that they incur," the intelligence officer cited above added.

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