THE ENFORCEMENT Directorate (ED) Tuesday summoned NCP leader and former civil aviation minister Praful Patel to appear before the agency in Mumbai on October 18, in connection with an alleged money laundering case involving Iqbal Mohammed Memon, aka Iqbal Mirchi, a close aide of gangster Dawood Ibrahim.
The ED had last week arrested Haroun Yusuf, a British national, and Ranjeet Singh Bindra, a Bandra-resident, on charges of money-laundering related to three properties allegedly owned by Mirchi.
Kicks up a storm in poll season
WITH Assembly elections in Maharashtra scheduled less than a week away next Monday, enforcement action against Sharad Pawar and Praful Patel of the main Opposition party NCP is set to muddy the waters and spark a war of words about the timing and intention.
On Tuesday, it claimed before a Special Court in Mumbai that alleged dealings linked to Iqbal Mirchi’s properties involve huge amounts generated from organised crime and used for “terror financing”. The ED also sought further custody of Bindra to ascertain utilisation of money.
“This is a sensitive case involving huge amount of proceeds of crime apparently generated from the organised crime sector and its subsequent laundering/ use for terror financing which is currently under initial stages of investigation,” the remand application filed by ED said.
The agency has alleged that Patel’s Millennium Developers Pvt Ltd constructed Ceejay House in 2006-07 and its third and fourth floors were transferred to Mirchi’s wife wife Hazra Iqbal in 2007 “towards beneficial interest of Mirchi in the land” on which Ceejay House was built. The ED alleged that the sale of the land to Millennium Developers is “through dubious means” and the sale proceeds have been “laundered” by Mirchi.
Patel, meanwhile, denied any wrongdoing and claimed that all dealings pertaining to the property were undertaken under the supervision of the Bombay High Court-appointed Court Receiver.
In a press conference, Patel claimed that the property and the land around it was bought in 1963 from the Maharaja of Gwalior by 65 people, including 21 members of the Patel family. This plot was then subdivided and a building called Shri Niketan was constructed in the 70s with the Patel clan as co-owners.
In the mid 70s, a dispute arose within the family and in 1978 a Court Receiver of the Bombay High Court was appointed to manage and look after the property. Patel claimed that on the land behind the building there was an illegal occupant who had constructed two restaurants. A suit was subsequently moved against the occupant named M K Mohammed by the court receiver for recovery of the property. In 1988, a court ruled in favour of Mohammed giving him rights on the property and asked him to pay an amount of Rs 7 lakh to the court receiver.
According to Patel, Mohammed had, in 1990, through a deed of assignment transferred his rights to Hajra Iqbal Memon. The amount of Rs 7 lakh due to be paid to the court was then paid by Memon.
Patel claimed that in 1996, an adjoining building called Poonam Chambers collapsed and the BMC subsequently declared Shri Niketan unsafe as well, which led to plans being made for reconstruction. Patel said that an SPV fully owned by the Patel family Millenium Developers was set up for carrying out the redevelopment of the said property.
During this period, Hajra Iqbal Memon is said to have submitted an undertaking to the High Court to remove herself from the portion in her possession if she was accommodated in the reconstructed property. Patel said that this entire exercise was carried out with the Bombay High Court appointed Court Receiver being a party to all the development.
Patel claimed that he had done no wrong and there was no information passed on to him by any government agency that Memon was an undesirable person and no business could be conducted with her.
“If the government agencies believed that she was an undesirable person it should have been duly notified. She is an Income Tax Payer. In 2005, she entered into an agreement with a bank for a property. She has been living in India and a passport has been given to her in 1999. The Supreme Court has restored her full-fledged passport and her right to travel. There was no reason to believe that she was a person who was undesirable or not to have dealings with,” Patel said.
He also claimed that there was no financial transaction between the Patel family and the Memons. He also denied that the Memons had any stake in Millenium Developers which he claimed was owned exclusively by the Patel family.
“There was no financial transaction. We have only provided an alternative accommodation. You vacate somebody from a place and you provide alternate property. In this case, because of reconstruction, an old tenant was given back an alternate accommodation. Her right had been established by the HC and not providing her with the accommodation would have been contempt of court,” Patel said.
“Had any form of notice been issued against her I would have personally approached the authorities to seek their permission before signing the agreement,” Patel said. He said his lawyers conveyed to him there was no notice against her.
Earlier in the day, Special public prosecutor Hiten Venegaonkar along with Sunil Gonsalves submitted before the court that the ED investigation had shown that the value of three properties Rabia Mansion, Maryam Lodge and Sea View-in Worli, was much more than the Rs 225 crore.
“We found in our probe…there were linkages, meetings held outside the country, some of which were attended by notorious gangsters with links of organised crime and subsequent terror financing which is being probed,” Venegaonkar submitted before the court.
“During the probe…the ED came to know that a loan of Rs 2,186 crore was also taken on the three properties which also appear to be proceeds of crime in the matter. As such, the ED is examining the transactions to establish the money trail and trace the ultimate beneficiaries of proceeds of crime so generated,” the ED claims. Yusuf, who was a chairman with a Mumbai-based Trust and Bindra, a broker, were arrested on October 11.
The ED claimed that the three properties in Worli, ‘appear to be proceeds of crime’ derived directly or indirectly from the criminal activity related to offences registered against Mirchi by the Mumbai police over 30 years ago. It further claimed that in 1986, a deal was struck between Mirchi and the Trust for Rs 6.5 lakh for the properties.
While the ownership of the properties could not be transferred to Mirchi then, it remained in the name of the Trust, with ‘deemed ownership’ with him, the ED claimed. It further claimed that in 2010, a private developer paid Rs 225 crore for the properties allegedly brokered through Bindra. It claimed that Yusuf had ‘misrepresented’ that the Trust had received complete payment for the properties from Mirchi and thus the properties were not attached as part of proceeds of crime of Mirchi, who was declared an absconding accused.
On Tuesday, the ED claimed before the court, that in their statements, the accused have said that meetings were held between the private developers and Mirchi in London and acknowledgment receipts of Rs 29 crore were received by one of the trustees of the Trust.
The ED further claimed that Mirchi’s two sons, Junaid and Asif, were also summoned but they did not appear before the agency citing legal grounds.
While ED sought to send Yusuf to judicial custody, Bindra’s custody was sought on grounds including inquiry of the mode and method of payments made by the private developer to accounts in Dubai. Yusuf was sent to judicial custody till October 24 and Bindra was sent to ED custody till October 19.
Abad Ponda, representing the two, told the court that the ED had referred to scheduled offences which were allegedly committed after 1986 and thus the properties could not be considered proceeds of crime. When the court asked the accused if they had any complaints against the ED, Yusuf said that he had not slept much as he was under pressure.