Despite piles of evidence against this Pune-based stud farm owner, the UPA regime has failed to act against his wealth in Swiss banks.
One glance at the Second Report of the Task Force appointed by the Bharatiya Janata Party to probe black money stashed away by Indians in secret bank accounts abroad and you will wonder whether the Constitution we adopted in 1950 is still in operation; whether there is anything called 'rule of law' in the country; whether we have a Government at the federal level or whether it has just withered away.
Apart from providing citizens a comprehensive view of the illegal funds parked in tax havens, the report zeroes in on some specific cases which highlight the reluctance of the United Progressive Alliance regime to go after the wrong-doers. The case of Ottavio Quattrocchi is well known. But, there are others and among them the case that constitutes a damning indictment of the Government led by Mr Manmohan Singh is that of Hasan Ali Khan, a Pune-based stud farm owner with billions of dollars in Swiss banks and deep connections with the Congress.
The extraordinary case of Khan, who has been described by a national weekly as the "Billion Dollar Bandit", gives us an idea of the rot that has set in. According to the BJP task force, Khan ventured into the hawala business in the 1990s and his bank balance grew from $1.5 million in 1982 to $8 billion in 2006. Among his associates and clients was Adnan Khashoggi, the international arms dealer who supplied weapons to the Liberation Tigers of Tamil Eelam. He received $ 300 million from Khashoggi, which was identified as "funds from weapons sale" by a Swiss bank.
The big picture vis-à-vis Hasan Ali Khan emerged between January 2-7, 2007 when the Income Tax Department and the Enforcement Directorate carried out raids on his premises. Tax officials unearthed three secret accounts held by him in Swiss banks with deposits aggregating $8 billion (Rs 36,000 crore) and documents establishing Khan's nexus with Khashoggi. They also concluded that Khan's illegitimate funds were linked to heinous crimes such as terrorism, gun-running and bribes, and suspected that he was probably fronting forsome politicians.
What happened, or to be more precise, did not happen, pursuant to these raids, raises the suspicion that Khan has some political godfathers within the Congress. The documents procured by the ED showed that on the date of the raid, Khan had liquid funds totalling $6 billion in his accounts, which he could move right away. The remaining $2.04 billion had a lock-in period until January 15, 2007 (which was just eight days from the last day of the raid). The documents also established that the Swiss Government had acted suo motu and frozen an account with $300 million held by Khan because it suspected that this money related to "funds from weapons sale".
As the task force report says, this should have resulted in the registration of an FIR immediately under the Unlawful Activities Prevention (Amendment) Act, 2004, so that India could have legitimately moved for freezing Khan's accounts soon after the raids on the ground that these monies were terror-related. This was precisely what the VP Singh Government did when it directed the Central Bureau of Investigation to register an FIR in the Bofors bribery case and sent a request for freezing the bank accounts of the recipients of the kickbacks in the field gun deal.
That was under the anti-bribery law. In Khan's case, the UPA Government ought to have acted under the anti-terrorism law. According to the authors of this report, Khan should have been arrested and taken in for custodial interrogation in regard to money laundering, arms deals and his possible links to unsavoury organisations. However, the Union Government took no action either to freeze the accounts or to prosecute him under the anti-terrorism law.
Surprisingly, the Income Tax Department, which customarily issues lakhs of notices every year to taxpayers with paltry salaried incomes, took no action at all on Khan, who had illegal funds amounting to Rs 36,000 crore. It accused him neither of tax evasion nor of money laundering. Instead, it sent a Letter Rogatory to the Swiss Government, merely complaining that Khan had not filed his tax returns in India. The Swiss Government dismissed the request for assistance and said non-filing of tax returns was no offence at all under Swiss law. This was how the Khan case was deliberately botched. Even more shocking was the Swiss Government's declaration that the documents attached to the Letter Rogatory were forged.
Further, laughable as it may seem, the ED served a "show cause notice" on Khan a good two years after the raids and "demanded" that he repatriate $8.04 billion with updated interest to India.
Needless to say, Khan had cleaned out these accounts in the meantime and this has since been confirmed by the Finance Minister, Mr Pranab Mukherjee. He informed mediapersons recently that there were no funds in these accounts. Khan, like Quattrocchi, must be laughing all the way to the new bank where he has shifted his ill-gotten wealth.
Thus far, despite clear evidence of money-laundering, involvement with international arms dealers, etc, Khan has never been arrested for any of these offences. He was, however, booked in a fake passports case (he has three passports). Thereafter, he obtained bail and did the disappearing act. But, the task force says, the police have a video recording of his interrogation done later, in which he confesses that while he ducked the police, he met a key Congress leader in Ms Sonia Gandhi's establishment, the Maharastra Chief Minister, the State's Home Minister, and the Commissioner of Police, Mumbai.
The Congress may cursorily dismiss these findings on the ground that this is a BJP report. But, that will not carry conviction because the main Opposition party has carefully chosen four citizens with impeccable credentials (Mr S Gurumurthy, a chartered accountant and a crusader against corruption, Mr Ajit Doval, former Director of the Intelligence Bureau, Prof R Vaidyanathan, Professor of Finance, IIM, Bangalore, and Mr Mahesh Jethmalani, a noted lawyer) as members of this task force. As the report says, this case is the "smoking gun" and there is so much loaded in this single bullet called Hasan Ali that it has the potential to prematurely terminate the life of UPA2.
Meanwhile, we must ask Mr Manmohan Singh, the 'Mister Clean' of yesteryears, as to why he was in cahoots with India's biggest money-launderer?
