PFI attempted to pass off suspicious donations as legitimate, claims ED

The Enforcement Directorate's investigation into the donations PFI received in 2018-19 revealed attempts to project suspicious bank transfers and receipts as legitimate credits. The income tax department cancelled PFI's registration after finding that sources of deposits in its various bank accounts did not match the financial profiles of account holders. PFI allegedly collected funds through a deep network in Gulf countries and the agency suspects it was conspiring and raising funds within India and abroad through banking channels, hawala, and donations. The Centre had proscribed PFI as an unlawful association.

The Enforcement Directorate’s (ED) investigation into the donations the Popular Front of India (PFI) had received in 2018-19 revealed that the organisation attempted to project suspicious bank transfers and receipts as legitimate credits, agency sources said.

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Details were not mentioned in several cases, making it impossible to locate the donors to verify the authenticity of their contributions, an ED officer said. “Several individuals in their statements, recorded under section 50 of the Prevention of Money Laundering Act, categorically denied any association with PFI or making any donation to the banned outfit.”

A tribunal, set up under the Unlawful Activities (Prevention) Act, had in March confirmed the Centre’s five-year ban on PFI for being an unlawful association. PFI had denied all allegations of wrongdoing against it.

ED sources said prior to several transfers to PFI’s bank accounts, equivalent amounts of cash were deposited in the accounts of suspected sympathisers to project the contributions as legitimate.

“The income tax department in March 2021 cancelled the registration granted to PFI and an allied entity under sections 12A and 12AA of the IT Act after it found that the sources of deposits in PFI’s various bank accounts did not match the financial profiles of the account holders,” the ED officer said.

The agency suspects that PFI, along with others, was allegedly conspiring and raising funds within India and abroad through banking channels, hawala and donations. “This was done by transferring, layering and integrating these funds through multiple accounts to project them as legitimate and using these funds to carry out various unlawful activities,” the officer said.

ED findings indicated that though PFI claimed it did not receive any foreign funding, it had allegedly collected funds through a deep network in Gulf countries.

“These funds were not reflected in the bank accounts of the organisation. Statutory compliance with collection of funds abroad and remittance to India have not been done by PFI and their related organisations as they are not registered under the Foreign Contribution (Regulation) Act,” the officer said.

The Uttar Pradesh police had arrested the national coordinator of PFI’s physical education division. The Centre had on September 27, 2022, proscribed PFI as an unlawful association.

A Delhi court had last November taken cognisance of an ED chargesheet against PFI and some of its activists who were allegedly involved in supervising the fund-raising activities and had managed the outfit’s public relations. The ED had provisionally attached proceeds of crime amounting to ₹86.36 lakh in 24 bank accounts of PFI and ₹8.22 lakh in seven bank accounts of a related entity.