ED slaps Rs 62 lakh notice against Zahoor Watali for foreign exchange rule violation

The Adjudication Authority under FEMA has fined Watali for operating NRE and NRO account in HSBC Bank in Delhi “in unauthorised manner”, ED claimed on Friday. It said the authority had slapped a penalty of Rs 62 Lakh on Watali after conducting the adjudication proceedings against him. Earlier the agency had issued a showcause notice of the same value to Watali.

According to ED, it began the investigation in the case after receiving information about certain suspicious foreign exchange transactions. During the investigation, it was revealed that Watali was maintaining Non-Resident Saving Accounts (both NRE & NRO accounts) in HSBC Bank, Greater Kailash-I, New Delhi.

“At the time of opening of these accounts Watali had submitted documents viz. the copy of the Passport issued at Washington D.C., resident visa etc claiming himself as a Non-Resident Indian, whereas during this period he neither remained outside India for more than 182 days in the preceding financial year nor was his intention to remain outside India for an uncertain period,” an ED statement said.

During the period from 2003 to 2009 Watali received inward remittances to the tune of Rs. 62,93,711 in these accounts, ED has claimed. “He continued holding of the accounts and allowed remittances in this account and thereby contravened the provisions of Section 4 and section 6(3) (f) of FEMA, 1999 read with Schedule 1 of Regulation 5(1)(i) of the Foreign Exchange Management (Deposit) Regulation, 2000. Accordingly, a Show Cause Notice was issued to Zahoor Ahmed Shah Watali on the basis of complaints filed under-section 16(3) of FEMA 1999,” the statement said.

ED has earlier attached properties worth close to Rs 9 crore belonging to Watali in connection with the terror funding case. Watali along with other nine accused in the case are under judicial custody in Tihar Jail.

NIA and ED have alleged that Watali was the key conduit between elements in Pakistan and Kashmiri separatists for terror funding. They have alleged that Watali also received funds through the Pakistan High Commission. The agencies have claimed that funding from Pak High Commission was substantiated through a document seized during searches at the residence of Ghulam Mohd. Bhatt, who worked as the cashier-cum-accountant with Watali. “The document shows that Zahoor Ahmad Shah Watali was receiving money from Hafiz Saeed (Head of Jamaat-ud-Dawa), from the ISI, from the Pakistan High Commission at New Delhi and also from a source based in Dubai. Watali was remitting the same to the Hurriyat leaders, separatists and stone-pelters of Jammu & Kashmir,” an ED statement said earlier.

It also said the document has been maintained in regular course of Watali’s business and is signed by him. “This document clearly shows that Hurriyat leaders were receiving funds from Pakistan through the officials of Pakistan High Commission and through Watali. The signature of Watali has also been verified and as per the expert report, his signature on the questioned document matches with his specimen handwriting as well as his admitted handwriting,” the ED statement had said. Watali along with other nine accused initially arrested by NIA in the case are currently in Tihar Jail.

The Indian Express had earlier reported that a major chunk of NIA evidence against Kashmiri separatists had been taken from open source: participation in funerals, a letter written by the Pakistan prime minister, their history of militancy, raising of Pakistan flags and ISIS posters during protests, calls for financial help to families of slain terrorists, and pictures with members of proscribed organisations.