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Explained: Who is Hasan Ali Khan, the Pune-based businessman facing money laundering cases?

Before the Income Tax raids across his properties 13 years ago, 65-year-old Khan was hardly known outside his business circles.

Written by Sushant Kulkarni , Edited by Explained Desk | Pune | Updated: December 22, 2020 9:15:20 am
Khan was arrested in March 2011 under the provisions of PMLA.

Pune-based businessman Hasan Ali Khan, who is facing cases of money laundering, was questioned for three days last week by officials of the Enforcement Directorate (ED) at his residence in the city. Having hit the national headlines in 2007, he was alleged to have owed more than Rs 34,000 crore to the government in tax dues. The Income Tax department had assessed his income during the six-year period between 2001 and 2007 to over Rs 1.1 lakh crore.

Accused of parking a part of this money in Swiss banks using hawala channels, and having links with international arms leaders, the case against him has largely crumbled, with government agencies yet to substantiate their charges in court.

Who is Hasan Ali Khan?

Before the Income Tax raids across his properties 13 years ago, 65-year-old Khan was hardly known outside his business circles. Before settling down in Pune around 2000, Khan lived in Hyderabad along with his sisters and a brother. His father was an employee in the excise department.

Khan tried his hands with different businesses in Hyderabad – he floated a car rental service, started a metal trading company, and launched another firm dealing with finance that was later accused of cheating some banks. Hyderabad Police’s papers list at least six cases of cheating, fraud and forgery against Khan, all registered in the late 1980s and early 1990s. According to Hyderabad police, Khan 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.

Horse-racing remained his key interest all throughout and he used to travel regularly to Mumbai and Pune and put large sums of money in races.

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What are the cases against him?

In 2006, government agencies are said to have gotten wind of purported dealings between Khan and 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. Anandraj happened to be at Khan’s residence when the raids happened.

Among other things, the IT sleuths found a letter in Anandraj’s laptop, apparently issued by the Union Bank of Switzerland, mentioning 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 also made. A subsequent raid at the residence of Kashinath Tapuriah, a Kolkata-based associate of Khan, found several transfer instructions which showed that Khan had from time instructed UBS to transfer monies to Tapuriah.

During later investigations, however, the Swiss authorities found all these documents to be fake. In a response to a letter rogatory from the Indian embassy in Berne, the Swiss Federal Office of Justice is said to have declared as forged the letter claiming deposits of $ 8 billion attributed to UBS.

After the raids, the IT department proceeded to assess Khan for the period 2001-02 till 2007-08 and assessed his total income during this period at a staggering Rs 110,412,68,85,303 (over Rs 1.1 lakh crore). On the basis of the above assessment, the 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 Khan. A chargesheet in this regard was filed in a special court in 2011.

In March 2011, ED arrested Khan. At that time, it also raided the Noida house of Philip Anandraj and the house of Kashinath Tapuriah. Tapuriah too was arrested later and was made a co-accused in the case. In August 2017 Tapuriah passed away in Kolkata.

Khan was arrested in March 2011 under the provisions of PMLA. He was in Arthur Road jail for four years and eight months in judicial custody. He was granted bail in August 2015.

What have the cases progressed?

The Income Tax Appellate Tribunal, D Bench, Mumbai, in February 2016 passed an order setting aside the assessment of alleged foreign income of Khan almost in its entirety and remanded the case back to the assessing officer for fresh adjudication after undertaking further investigation in the matter. The effect of the Tribunal’s judgment is that currently, the only tax liability that stands confirmed against Khan is a mere Rs 3-4 crores for an income of Rs 10 crores as against the astronomical figure of Rs 34,000 crores for an income of Rs 1.1 lakh crore.

The two ED cases filed in 2011 and 2018 are currently pending before a Special court for cases under the Prevention of Money Laundering Act (PMLA) in Mumbai. While the ED has filed chargesheets in both these cases, trial is yet to begin. An ED chargesheet in one of the cases had accused Khan of the ‘theft of a diamond at Salarjung Museum, Hyderabad,’ adding that he ‘sold the same in the international market for $700,000 and laundered the same in the name of a front company.’ The museum and the Hyderabad police, however, have subsequently clarified that no such diamond was stolen from there.

Meanwhile, in July 2016, the Central Bureau of Investigation also filed a case against Khan and some unidentified government officials for criminal conspiracy and corruption. Khan has been interrogated in the case a few times by the agency but a chargesheet is yet to be filed in the case. He is also an accused in a case in Pune where he is accused of possessing forged passports. A chargesheet is yet to be filed in the case.

Why was he questioned last week?

In the latest development, ED officials questioned him over three consecutive days between December 17 and 19. The questioning was with regards to PMLA cases of 2011 and 2018.

Khan’s lawyer, advocate Prashant Patil has said, “According to what my client has told me, there was absolutely no question that the ED has not asked him over and over again since the last many years. This just shows that they have no case. We have made applications to start the trial as soon as possible because Mr Khan is in extremely bad health and is having multiple health complications. He has been summoned by the ED and CBI Offices at Delhi and Bombay on a number of occasions and he was harassed over the same alleged transactions which are pending before the Special Court. The basic question here is after 14 years of investigation, if Mr. Khan is facing two cases of Money Laundering Act, then where is the money?”

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