The first witness in the Hasan Ali case, now almost 15 years old, is likely to be produced by the Enforcement Directorate (ED) on 10 June 2022.
Ali, who in 2007 had an income tax bill of Rs 34,000 crore on his head and was named as India’s biggest money launderer, does not visit the Pune Turf Club anymore. Ali, often alleged to be the front man for holding black cash for some top Pune conglomerates, no longer seeks tea from waiters of the 192-year-old club.
He is suffering from multiple ailments.
70-something Ali, who has a farm for horses in Hadapsar, is ailing in a hospital, and has pleaded not guilty in the money laundering case against him on 19 May 2022. Wednesday.
Attending the proceedings through video conferencing, the ailing Ali heard Special Judge M.G. Deshpande framing charges against him under the Prevention of Money Laundering Act (PMLA). Ali asked Deshpande if he could be tried by a PMLA court.
Ali has been charged under Sections 3 (money laundering) and 4 (punishment for money laundering) of the PMLA 2002. He faces punishment between three and seven years of imprisonment.
Ali said 15 years is a long time and he wanted the trial against him to be expedited, citing various illnesses. His case was one of the first few to be registered under the PMLA in Mumbai. The PMLA was enacted in 2002 and implemented in 2005 to check crimes of tax evasion, black cash, money laundering and terror financing.
The onus is now on the Enforcement Directorate to produce the first witness in as many as 15 long years. “The Enforcement Directorate (ED) shall note that long dates will not be kept in the matter and they should bring their first witness as early as possible.” The case has been adjourned till 10 June to allow the ED to bring its first witness.
It was in 2007 when the ED had registered a case against Ali based on information from the Income-Tax Department, alleging that he and his associate maintained bank accounts in Switzerland. But it was not easy for the ED, which had tried hard to block the transfer of funds from his Swiss accounts. The Swiss authorities said the documents were forged and sought more details to undertake the process.
On 7 March 2011, Ali was arrested by the ED, but he managed bail four days later from a special PMLA court. The ED moved the Supreme Court and pushed Ali in prison till 2015.
The ED charge-sheeted Ali and co accused Kashinath Tapuriah of Kolkata on 6 May 2011. The ED detailed two transactions made by Khan in the charge-sheet.
The first was Ali’s alleged transfer of $700,000 from Bank Sarasin, Switzerland, to the account of SK Financial Services in UK’s Barclays Bank. The second transaction was Ali’s alleged receipt of $93 million in his bank account at SBC (Singapore Banking Corporation) Singapore. The ED claimed Tapuriah was operating Khan’s account in SBC Singapore as his power of attorney. What is interesting is that Tapuriah confessed in 2009 in Kolkata to the ED on record about the existence of multiple accounts of Ali in tax havens. But the case received a big jolt as Tapuriah passed away in 2017 and the proceedings were pending.
The case went through its ups and downs, Ali was questioned by a team of ED officials at his residence in Pune in December, 2020. Ali—it is reliably learnt—has been under the scanner for long. His links with some top politicians were also under probe. The ED asked him details about his numerous failed business ventures.
Old-timers remember him at the Turf Club; Ali allegedly gifted his friends marble statues as antique pieces. When his cash ran out, he started a car rental service in Hyderabad but shut shop in 1988. A scrap business shut shop in Dubai in 1993. He started a jewellery store in Kuwait with a Srinagar-based partner but that did not work for long and was under probe by the ED. Ali started testing his fortunes on racing horses, first entering the racing courses in Hyderabad, followed by the Mahalaxmi Race Course, Pune, Bengaluru, Chennai, Delhi race courses before expanding his racing business to Switzerland and London.
At the Turf Club, members said Ali loved racing horses, splurging cash to buy horses from all over India. Ali owned a fleet of cars worth crores of rupees, and hosted some lavish parties in Pune and Mumbai.
Till date, Ali remains a man with big connections. ED officials say Ali was allegedly holding black cash for some top conglomerates in Pune and Mumbai. He once had two allegedly fictitious companies, Autumn Holdings and Paysons in the Virgin Islands and allegedly laundered $280 million. He has been interrogated by the Mumbai Police, I-T department, RBI and Securities and Exchange Board of India (SEBI) and the passport division for several offences. He was once jailed in a fake passport case
In short, Ali was never out of trouble.
He was accused of parking cash abroad using hawala channels and having links with international arms dealers but somehow the charges have not been conclusively proved by the investigating agencies. But now, the agencies will have to produce their witnesses to nail Ali.
Ali has had a very chequered career, claim investigating agencies. Cops in Hyderabad list at least six cases of cheating, fraud and forgery against Ali, all registered in the late 1980s and early 1990s. Ali had been booked for cheating a bank to the tune of Rs 26 lakh. In another case, he is alleged to have cheated four people, from whom he took Rs 70 lakh in total, promising them dollars as commission. In 2006, government agencies started probing his dealings with Philip Anandraj, a Switzerland-based hotelier, for buying a hotel in Switzerland. The IT department raided his residence on January 6 and 7 in 2007.
Interestingly, Anandraj was at Ali’s residence when the raids happened.
It was the first trigger for the ED, which found a letter in Anandraj’s laptop, apparently issued by the Union Bank of Switzerland, alleging that an account in Khan’s name had $8 billion (about Rs 37,000 crore at that time) in deposits. From the details of money transfers into this account, a link with international arms dealer Adnan Khashoggi was found by the ED officials. A subsequent raid at the residence of Kashinath Tapuriah, a Kolkata-based associate of Ali, the ED officials found several transfer instructions from Ali, asking Tapuriah to transfer cash to UBS from time to time.
But UBS called the letters fake.
But then, the Income Tax department moved in and assessed Ali from 2001-2008 and found his total income during this period at a staggering Rs 1.1 lakh crore. On the basis of the above assessment, the I-T department demanded a tax of approximately Rs 34,000 crores. The assessment made by the IT became one of the grounds for the Enforcement Directorate (ED) to allege money laundering by Ali. A charge-sheet in this regard was filed in a special court in 2011.
But the Income Tax Appellate Tribunal in February 2016 passed an order setting aside the assessment and asked the assessing officer for fresh adjudication. Now, Ali’s tax liability is a mere Rs 3-4 crores for an income of Rs 10 crores.
The two ED cases filed in 2011 and 2018 are currently pending and the ED has not given up hope. It still maintains Ali had an account with UBS in Switzerland. And then, there was the case of three ED officers who were transferred midway through the case but were reinstated by the Supreme Court.
All eyes on 10 June 2022 and the first witness who ED will produce in the case. The ED still believes Ali has the cash abroad, he is just not saying anything about its whereabouts.
Ali’s lawyers are asking the ED: Where is the cash?
(Shantanu Guha Ray is a Wharton-trained journalist and award-winning author. He lives in Delhi with his wife and two pets. He won the 2018 Crossword award for his book, Target, which probed the NSEL payment crisis.)