Pune-based businessman-cum-horse breeder Hassan Ali's alleged involvement in a Rs 350 billion ($7 billion) illegal money transfer racket, under probe by the enforcement directorate and other agencies, will now also be investigated by the Securities and Exchange Board of India (SEBI).
"We have sought the assistance of SEBI in the multi-agency probe into the high-volume alleged hawala transactions of Hassan Ali Khan that played a big role in Indian bourses," an enforcement directorate official told on condition of anonymity.
SEBI will join the Central Bureau of Investigation (CBI), Intelligence Bureau and Research and Analysis Wing (RAW), apart from the income tax department and Enforcement Directorate in the probe, making it the largest multi-agency probe in the country in recent times.
"Investigations reveal that hundreds of billion of rupees were routed out of India through hawala and other banking channels. The monies were subsequently 'parked' in foreign banks in Switzerland, Mauritius and the Caribbean islands, before being re-routed to India and ploughed into the Indian stock markets," the official revealed.
"We are trying to trace the funds and have asked SEBI to provide details of all foreign institutional investors (FIIs) in the Indian stock markets."
Meanwhile, the income tax department has handed over several documents pertaining to international banking transaction between Ali and his associates abroad.
Tax sleuths stumbled on the unaccounted wealth in the illegal money transfer racket during raids at Ali's upmarket residence in Koregoan area of Pune Wednesday and found the details on his computers.
The department then informed the Central Board of Direct Taxes, the finance ministry and the Enforcement Directorate, which have subsequently frozen seven of the 10 accounts operated illegally by Ali in Swiss banks.
"It was Ali's lavish lifestyle that got us suspicious. He neither filed income tax returns nor did he have a Permanent Account Number (PAN). He, however, owned expensive and flashy cars including a Porsche, a Bentley and a Mercedes. He led an extravagant lifestyle," said a senior I-T official in Mumbai.
"It was only after the raids in January that he acquired a PAN," the official revealed.
Ali, who hails from Hyderabad, is a prominent businessman based in Pune where he runs a thriving horse breeding stud farm. He also owns properties worth billions of rupees in Pune, Mumbai, Hyderabad and Bangalore.
Besides owning 25 through-bred racehorses, Ali is a known face on the derby circuit and shuttles between Pune, Mumbai, New Delhi, Bangalore, Chennai and Kolkata, India's major horse racing centres, informed sources said.