After more than four years of probe, substantive evidence against Hasan Ali continues to elude investigating agencies
Even after a prolonged investigation by India’s top agencies, any substantive evidence against the 53-year-old alleged money-launderer and biggest tax evader in the country, Hasan Ali, remains as elusive as it was three years ago, when the Income Tax Department conducted first raids on him.
This is in spite of all information related to Hasan Ali being shared under the umbrella of a multi-disciplinary group, formed in mid-2009. Based in Mumbai, the group has representatives from the Enforcement Directorate (ED), Income Tax (I-T) Department, Intelligence Bureau, Reserve Bank Of India and Economic Offence Wing of Mumbai Police.
The allegations against him range from income tax evasion to black money hoarding and threat to “national security”, but the results of the probe — both within and outside the country — have turned out to be a wild goose chase.
Following a rap on its knuckles from the Supreme Court (SC), ED now claims Hasan Ali and his alleged associate, Kashinath Tapuriah, have disclosed their links with top politicians in the country and international arms dealer Adnan Khashoggi.
The new direction of investigation is based on the premise that Khashoggi and Russian businessman, Suleiman Kerimov, alleged to have a nexus with the local mafia, utilised the expertise and network of Khan and Tapuriah to divert funds in the global market.
ED is forming a chain of events with Ali’s bank accounts, transactions, correspondence, businesses and associates.
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It is also collecting information on Ali’s trips to different countries and his business dealings. Ali is currently in ED’s custody after the Supreme Court rejected his bail plea last month. (Click here for table)
An ED official, who did not want to be named, told Business Standard: “What we know is that the I-T department has asked Ali to pay Rs 70,000 crore towards penalty for tax evasion. He is reported to have black money worth $8 billion in foreign banks. Following the SC directives, we are compiling these details before preparing a comprehensive chargesheet against him. It is a time-consuming job.”
Simultaneously, ED is expected to carry out raids on Ali’s associates, too. The official recalled that raids were conducted at the Pune residence of Ali’s chartered accountant, Sunil Shinde. Shinde has been Ali’s accountant since 2007.
Moreover, ED would also look into Ali’s alleged nexus with terrorists and the underworld and build up a case on terror charges, as his activities pose a threat to national security.
The official said that adequate security measures were taken, especially as Ali had said he was receiving threats.
Hasan Ali came into the limelight in January 2007, when the I-T department searches were conducted on him and his associates in Pune, Kolkata, Mumbai, Bangalore and Hyderabad. The department searched Ali’s residence in Pune and Tapuriah’s in Kolkata.
On the basis of the documents seized, the department raised a whopping assessment demand of Rs 71,845 crore in December 2008 (see table).
The tax demand raised on Hasan Ali alone is Rs 50,329 crore. Rest of the amount includes Rs 49 crore on his wife Rheema, Rs 591 crore on Tapuriah, Rs 20,540 crore on Chandrika Tapuriah and Rs 336 crore on M/s R M Investment & Trading Co Pvt Ltd.
The most critical information that led to the assessment of tax outstanding came from a laptop seized from Hasan Ali’s residence during the search. It mentioned Ali’s bank accounts abroad. This laptop belonged to one Anand Phillipraj.
The corroborating evidence came from the information in a pen drive found during the search at Tapuria’s residence in Kolkata. Similar documents were also found in the pen drive, indicating Chandrika Tapuriah’s accounts in UBS. The information stored in the pen drive helped in matching of the information and acted as corroborating evidence.
Interestingly, compared to the mammoth tax demand, the recovery from Hasan Ali and others has been a meagre Rs 60 lakh cash seized during searches. Four immovable properties and some small assets have also been attached. The total value of these would not be more than Rs 6-7 crore, according to a senior I-T department official.
On the basis of the documents, the I-T department had initially approached the Swiss authorities, before the assessment, to seek their help in the probe, under Double Tax Avoidance Agreement. Swiss authorities, however, said there was no provision under which they could provide help sought.
Subsequently, the department approached Financial Intelligence Unit (FIU) Switzerland through FIU India. This also proved to be futile and it was asked to approach the authorities under the mutual legal assistance treaty, as banks were not covered under FIU.
At this point, the department completed the assessment. The taxpayers (Hasan Ali and associated individuals) went before commissioner (appeals) in Mumbai. The commissioner, however, rejected the appeal and confirmed the assessment towards the end of 2009.
Following this, the department sought prosecution over non-filing of tax returns under Section 276 (C). The case went to the Chief Metropolitan Magistrate (CMM) court in Mumbai. The department, then, obtained the leverage ratio (LR) from the court in mid-2010 and sent it to Switzerland through CBI’s International Police Coordination cell for further action.
Towards the end of 2010, the I-T department received a communication from the Swiss Department of Justice that offences for which the LR was filed didn’t come under prosecution under Swiss laws. The communication outlined that the LR could be processed only if there was criminality involved.
The I-T department is now said to be trying to get further information from more than three countries.
Both ED and I-T officials handling the case say, on the condition of anonymity, it can be easily inferred on the basis of investigation results “Hasan Ali is no more than a small crook who might have acted as fronts for some influential people”.