THE FOCUS of the money laundering probe against controversial televangelist Zakir Naik is now on the two schools set up by him and the properties purchased through alleged front companies which purportedly showed “no business activities”. The Enforcement Directorate (ED) has pegged Naik’s net worth at Rs 3,000 crore.
According to sources, between 2003 and 2016, the Islamic International School (IIS) received Rs 57 crore from Naik’s now outlawed Islamic Research Foundation (IRF). Of this, IIS made cash withdrawals of Rs 56 crore, which is shown as money spent towards payment of salaries of its teachers/ staff, scholarships and rent for the school premises — Rs 4.48 crore was withdrawn as rent in 2010-2016.
IIS is run by the IRF Education Trust, which was registered with the Charity Commissioner, Mumbai, in 1993. It has one branch in Mumbai and another in Chennai.
Sources privy to the investigation told The Indian Express that in 2009-10, over Rs 6 crore was transferred from IRF’s account to Longlast Construction Private Ltd, one of the six alleged shell companies floated by Naik to buy real estate in Mumbai and Pune. During this period, Longlast Construction, in which Naik was a director till March 2013, reportedly bought a land parcel in Byculla in South Mumbai for a school building as the IIS operates from rented premises.
After Naik stepped down as the director, his sister, Nailah, and close aide, Abdul Amir Gazdar, became directors of Longlast Constructions. Gazdar, a marble trader by profession, was arrested by the ED last month.
Investigators have recovered application forms of students from weaker financial backgrounds who were granted scholarships. They were reportedly granted admission if they expressed their “intent to become Islamic preachers” on competition of their studies. Most of the students were from the Muslim-dominated suburban pockets of Govandi, Chunabhatti, Mankhurd, Chembur and Behrampada. They constituted close to 20 per cent of the 170 students studying at the Mumbai branch.
“The annual school fee is Rs 3.8 lakh. In all, 170 students were enrolled by the school. We did not find any student from middle-class income group. They are either from the upper class or from under-privileged class. Those from the lower income group managed to get admission through scholarships,” said an official.
“Students who were admitted through scholarships were told to fill an application form where they would mention that the purpose of education was to become Islamic preachers in the future,” said the official. “Naik’s IRF wanted to nurture young children who spoke English, but were deeply religious and followed the tenets of Islam and even preached them in the future. Therefore, they funded many scholarships and other events,” said the official.
The school in Mumbai hired 80 teachers and 30 non-teaching staff.
“Longlast was one of the six companies floated by Naik to round trip his money. These companies showed no business activities of any nature. There were no books maintained to record the minutes of meetings of either their boards of directors or employees,” said the official. “This is a clear case of money laundering through layering of funds.”
Meanwhile, Gazdar’s interrogation has reportedly revealed that Global Broadcast Corporation FZ LLC, a Dubai-based TV broadcasting company, bought media content produced by Harmony Media — a Mumbai-based media production company floated by Naik in which Gazdar is a director — for Rs 42.87 crore. However Global Broadcast Corporation sold the content free of cost to Peace TV, a free-to-air non-profit satellite television network broadcasting globally from Dubai.
The Peace TV website shows that it broadcasts programmes of many internationally renowned scholars and orators, including Naik and Maulana Parekh of India. “We are probing why Peace TV was airing Naik’s content free of cost. We suspect that Naik may have some kind of stake/ interest in Peace TV. The channel was used to air Naik speeches which were pro-terror,” claimed the official.
“Gazdar is a director of Global Broadcasting Corporation, which we suspect is a front company used to round trip the money back to India by showing purchase of media content from Harmony Media, which is again a shell company floated by Naik,” said the official.
Harmony Media, a video and software production company, was incorporated in 2005. Naik was the managing director from May 8, 2006 till he resigned on March 13, 2013. His wife was appointed on the board on May 8, 2006, and resigned on March 15, 2013. In the last couple of years, while Longlast Construction saw a surge in borrowing, Harmony TV saw a steady growth in revenue.
A scrutiny of Naik’s accounts from documents accessed by The Indian Express reveals that Naik remitted Rs 47.69 crore from his Dubai-based accounts (Emirates Islamic Bank) to his Indian account (Union Bank of India). The funds have been shown as proceeds from investments. “The funds were immediately transferred to the accounts held by his late father Abdul Karm Naik, his mother Roshan and sister Nailah Noorani,” said an official.
Of the Rs 25 crore received by Noorani from her parents in her accounts with UBI and Development Credit Bank, Rs 50,000 each was deposited in Majestic Perfumes Pvt. Ltd and Alpha Lubricants Pvt Ltd, Rs 11.57 crore in Longlast Construction Pvt Ltd, and Rs 9.30 crore in Harmony Media Pvt Ltd. “All these are shell companies floated to launder money which was basically unaccounted donations received by IRF. The probe is concentrating on ascertaining the flow of the money,” said the official. Noorani is expected to record her statement before the ED next week.
When contacted, IRF counsel Mubin Solkar said all the six companies were incorporated “to do business” and none of them are sham. “These companies were floated to do business. In some cases they were already doing business, and in other cases they were incorporated to do business. None of them are sham companies and they have Memorandum of Association and Article of Association to state what these company ought to do,” said Solkar.
“We have shared all the documents and the book of accounts with the Mumbai Police which first started probing the case and no case has been registered so far by the Economic Offences Wing of the Mumbai Police which probed the case. We are open to the investigation being done by the ED,” he said.
Solkar added that all the donations given by IRF have been accounted for. “I won’t be able to speak on every donation but every expense has been accounted for,” he said.
Sources close to the Naik family said they would submit all the proof regarding the companies’ investments to the ED. “Nailah has been summoned by the ED and we will submit all the documents pertaining to the company she was director with — the investments and the proposed investments by the company. The same goes for other companies as well,” said a family source.
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