Derailing of the hawala mail

If you could just see what’s inside. In the folds of a pair of trousers and some shirts are two fistfuls of gold jewellery—hoops, delicate earrings, finger-rings, heavy chains and bangles.

Now multiply this cache by 16. That’s the number of gold smugglers on the Netravati Express bound for Ernakulam, Kerala. Sixteen men with 16 suitcases carrying a bounty of Rs 60 lakh a trip. For just one gold-hawala operator, among scores in Mumbai, it brings Rs 18 crore a month. And mind you, we are talking about the fag end of the era of gold smuggling here.

The group of 16, with melt-in-the-crowd looks, seems like they regularly take this southern sojourn. You can see it in the efficiency of their movements. They stand peacefully amid the railway announcements, hawkers, shouts and the last-minute tension rising from the waiting passengers.

In minutes, the Netravati Express grinds to a stop. They break into smaller groups and deftly shoulder their way past the frantic crowds. With enough time to spare, they have managed their way into the unreserved compartment. Inside, their eyes dart left, right, left, for a spare seat. Found one. They first loop a strong metal chain on the handle of the suitcase to the wooden seat, before settling in for the 26-hour journey.

How it all began

Gold smuggling has travelled a long way into the third-class compartment of a train. Wonder who will include this scene as the climax in a Bollywood film. It used to be when crates of gold biscuits were dropped in the middle of the night into the Arabian Sea off Batkal (Karnataka) and Kasargod (north Kerala). The speedboats would zoom off and some time later, divers in wetsuits would stagger back on the beach with the consignment. Now that is Bollywood masala.

Gold was the bedrock on which the mafia built its empire. Dawood, the nucleus of hawala, started off by stealing a consignment dropped off Haji Ali in Mumbai. The late 80s and early 90s saw a steady rise in smuggling, which fuelled hawala. Money from gold, drugs and other contraband were used to fund gang activities till the bomb blasts in 1993. Hawala continued to remain the bedrock even after extortion replaced smuggling by mid-1990s.

Investigations into the serial bomb blasts in 1993 have exposed Dawood’s underworld links and his money sources. All other smugglers were in a spot before the trend began to reverse.

And then they slashed duty on gold. Once, twice and now it is 23 per cent of what it used to be a decade ago. Ever since the Konkan Railway started, in just three years, Netravati Express has become a haven for angadias like Sam who shuttle between Mumbai and Kerala regularly.

The Konkan rail ride

THE train rumbles out of the station and it is time to take stock. Sam walks upto the passageway and stretches. A glance ahead, one over the shoulder, all 16 are in and with seats.

Sam, a Goan, is sitting with Naresh, a Marwari. The two are gold craftsmen and this hawala run dovetails neatly into their trade. But not all of Sam’s group are craftsmen. Some journey to do the run and each gets Rs 1,000 for a trip.

All know a smattering of Malayalam. Sam introduces himself as a travelling salesman to the man sitting next to him. When the teaboy passes, they greet each other with familiarity.

Sam spends the evening with an elbow on the window ledge, watching the breathtaking route of the Konkan Railway rush by. Next week, Sam will take a break. Dhanda manda hai (business is down).

Hawala’s highs and lows are linked to seasons, festivals, market conditions and more so during international cricket matches. Hawala operators in Mumbai are part of the Dubai-Kerala network which used to process Rs 400 crore daily. Now it is just Rs 50 crore, says a hawala operator, who gave his name as Ramesh. Except for the days of big matches. The World Cup India-Pak match moved hawala upto Rs 400 crore. Most foreign-based bookies prefer to lay bets in India to avoid high taxes in their countries.

In Dubai, according to sources in the crime branch, some of the big hawala operators are Saukar, Mohideen Abdulla alias Kasargod, and Shamshudin with his able assistants Hasan, Umer and Abu.

In Mumbai, the narrow bylanes of Bhuleshwar in central Mumbai is the hawala hub and the adda for angadias. There is Chandu, who corners more than Rs 10 crore—a fifth of the daily business. Dilip Marwari is another key player.

Goa by night

GOA comes by night. The odd backpacker gets off at Madgaon. The train pulls out at 10pm and the night passes with Sam’s neck thrown back and his mouth wide open.

The beach state, along with Kerala, Tamil Nadu and Karnataka, were emerging as the new stops in the 400-500 billion USD drug market across the globe. A senior Narcotics Control Bureau Zonal official, who is also refered as ‘O Ji Ji’ (Ghost) by African drug traffickers, says Mumbai is no longer the main transit point for international drug trafficking.

After 9/11 and the Bali attack, local drug cartels along Goa and Mangalore are unravelling. Sweeping investigations into underworld links with hawala brokers have eroded the business in just a couple of years.

Back in Mumbai, a government drugs sleuth in disguise paces up and down the smooth cobbled stones of the Docks. This source in an investigating agency says 600 tonnes of charas—funnelled by the mafia—still manages to come in a month. And just a tenth of it ever gets seized.

The terror angle

Apart from drugs, the hawala-terror formed in the early 90s has also taken a hit after 9/11. London-based Dr Ayub Thuker, who is said to have funded Hurriyat Conference leader Syed Ali Shah Geelani, was the alleged source of hawala funds for Kashmiri militants in the Jain hawala case in 1991.

Moreover, politicians accused of conspiring to demolish the Babri Masjid as well as those who perpetrated the Mumbai bomb blasts were both allegedly funded by the hawala terror network involving Moolchand Shah.

After 9/11, the government has woken up. With intelligence reports streaming in days before attacks, banks have been put on alert. After the encounter in Goregaon (Mumbai) where three LeT men were killed, DCP (crime) Pradip Sawant confirmed that some of the terrorist outfits in the city have received funds through hawala operators.

Meanwhile, Bollywood—that other bastion of the underworld—gets fewer calls for extortion, more for arm-twisting on overseas rights. That’s where all the money is anyway, in the last year of flops. According to intelligence reports, Dawood Ibrahim owns more than 15 cinema halls in the United States and Canada. Why cinema halls? Your halls may be empty but it is the easiest ‘‘protecting’’ the streets of Lower Parel has gone through the hawala route and found its way into the market as receipts from the cinema halls.

Enter Mattanchery

SAM and Naresh are up when the sky is still a cerulean blue and there is no sign of the sun. Calicut by 7.30am, Trichur by lunchtime. As the train rolls to a stop at platform number one in Ernakulam City, it is 3.30pm.

A taxi-ride of 30 minutes and they reach the town of Mattenchery, 12 km south of Cochin. In the area called East Fort, Sam and Naresh walk up the touristy street with Tibetan masks and prayer wheels. And then the jewellery shops begin. One, two spice traders and then every third shop is a gold shop. This tiny town around four sq km in area has a 100 gold shops!

Up in Chandigarh, gold has taken on a different meaning. Golden Forests India Limited, run by R K Syal, made Rs 3,000 crore from 24 lakh investors vanish.

Neeraj Chaudhary, Syal’s former attorney in Chandigarh, says the company may have siphoned off big sums abroad where his family and a son live through hawala. He wonders how a company that initially had enough liquid assets to repay investors, has now claimed bankruptcy.

The rise of Golden Forest chairman R K Sayal’s was meteoric. From a small clerical job about a decade ago, he ran a Rs 1,300 crore empire on the edifice of deposits. He also bought a helicopter to fly him from his residence in Panchkula to the company’s secretariat at New Chandigarh — 40 km from Chandigarh.

SAM, meanwhile, has walked into one small jewellers’ entrance. If you follow him in, there is nobody in the shop but for a salesman with perhaps the best poker face in the country. Sam is in the inner chamber. He walks out after five minutes. The VIP suitcase has lost its gold.

The story would have ended there had these men returned with the cash.

They get paid in Mumbai. Insiders say that some of the jewellers located near East Fort make their payments in Mumbai through hawala operators in Dubai. The jeweller’s brother works in a garment factory in Dubai and this is how he sends his earnings back home.

Sometimes, the worker in Dubai just wants to send some cash. He calls up a hawala operator.

Back home, they come in a car or on a mobike, mostly in a pair, step out and ask the address. When they come to you, they just ask you if you are let’s say, Sunder. If the answer is yes, they hand over this black polythene bag, the one that the Express campaigns against in Mumbai and the one the butcher who sells “goat’s mutton’’ in Malaviya Nagar, Delhi, uses. The bag may hide a million or just a few thousands in Rupees. They don’t ask you any question, neither do they entertain any. They ride away.

Now if you are not Sunder and just pretended, they will come calling. A few days later, there will be knocks at midnight. They will drag you out, take you away to faraway destinations, torture you till they get their money back. (These are all from real-life experiences, and there are cases of death too, though very rare). The whole thing, as everything else in mafialand, operates on trust. The consumer does not cheat the operator, the operator does not cheat the dealer, the dealer does not cheat his boss, the big one.

Then there are wars. Between factions of hawala operators. They are fierce and sometimes bizarre. One imported a busload of goons from Mumbai just to ensure that his daughter’s wedding could pass off peacefully. The rival had threatened there would be bloodshed. Imagine, the site of Marathi-speaking Wagles and Baburaos on the streets of small-town Kerala. There are instances when the fights broke out on streets.

Hawala had brought instant riches to a lot of people. People who made rotis in Dubai resurfaced as hoteliers back home. One person just allowed a hawala operator to use his premises to store money, lots of gunnybags, for three months. He paid off a lot of debt and started a business.

These stories still do the rounds in the backwaters but there are many which are not new. The exodus of immigrant workers to the Gulf countries who had been remitting money to their families in India. Jobs opportunities have dried up and those who are there are returning.

A hawala operator who gives his name as Ramesh says business is no longer as lucrative as in Kerala. Official banking systems have become effective in recent years. Hawala rates have gone down from around Rs 3 to Rs 1.25 per exchange of a US dollar. Users are reluctant to take risk for little gains.

But for a people for who hawala is a habit and even small profit counts, riders on Royal Enfield still pierce the calm of the Chavakkad night.

(With VIKAS KAHOL in Chandigarh)