It is said that attached assets are usually inadequate to recover the dues of tax offenders. Is Hasan Ali Khan really India’s biggest tax evader as being touted by the enforcement agencies?
Is he a con man who charmed people into believing him to be a business tycoon or a venture capitalist? The mystery over Khan’s money laundering empire deepened further after finance ministry last week told the parliamentary standing committee on finance that it will be difficult to recover the tax arrears of Rs 91,859 crore by selling Khan’s properties attached by enforcement agencies during the probe.
This raises questions on Khan’s modus operandi. Is Khan a front for other money launderers which the investigating agency officials believe he could be? Is the net worth of Khan over pitched? Did Khan dupe gullible people through a web of fake documents that showcased the 60-year-old as a filthy rich man?
Behind the bars in various cases in cluding tax evasion, passport forgery, antique smuggling and money laundering case, Khan has been accused of stashing US$ 8 billion unaccounted money into Zurich branch of United Bank of Switzerland (UBS). The Income Tax department in Mumbai had raised tax demand on Khan and his four associates a year after seizing documents during a raid conducted at his premises in January 2007. The Income tax department Mumbai assessed the income of Khan at Rs 110, 412, 68, 85,303 from 2001 to 2008.
The massive liquid money Khan wired out of the country is quite a puzzle, given the fact that he has no substantial assets in India to show that he is a high net worth individual. His annual income declared by himself before the agencies from horse racing was `20 to 25 Lakh per annum and assets too low to recover tax dues.
Khan had told ED officials that his wife Rheema Khan owns two immovable properties—one at Mumbai’s Peddar Road, purchased for `1.40 crore in 2003 and another at Koregaon Park, Pune. He also owns a second hand black Porsche Cayennes bought in 2006 for `61 Lakh. Sources in ED said it appears that the case against him may take more time as many overseas banks used by Khan to channelise the money were not cooperating.
“The agencies have requested Swiss banking authorities for a meeting so they can place documents related to Khan’s case used for parking unexplained income. We are still awaiting a reply from the Swiss authorities,” Sources said.
UBS in February 2011 had denied having Khan as its customer by claiming that the documentation supposedly corroborating such allegations is false. UBS does not have accounts for, or any assets of Khan, and has no knowledge of the alleged money transactions.
Meanwhile, another officer said that the investigations are complex and verifying the details of overseas transaction will require time.
“The authenticity of the UBS bank documents will be verified during the proposed meeting to ascertain the money-trail. There is a possibility that he may have created a paper trail of purported wealth and foreign accounts to influence powerful people he shortlisted as his target. The truth will come out soon,” the official remarked.
In 2009, the ED, had sent Letter Rogatory (LR) to five countries, including Switzerland and Singapore, seeking confirmation of the accounts and money parked by Khan.
Sources say that while they managed to trace a transaction showing that Khan received $300 million in his UBS Singapore account allegedly from arms dealer Adnan Khashoggi’s Chase Manhattan bank account in New York, a detailed enquiry is required to make it a watertight case. Another amount of US $7 million was tracked after it received confirmation from a reply to Letter Rogatory (LR) from US. On Khan’s instructions, the money was transferred from an account in Sarasin Bank in Switzerland to the account of SK Financial Services in Barclays Bank in London.
Sources said that during the ED investigation in Mumbai, the agency received complaints from people that Khan had cheated them on the premise of providing them business or huge sums as loans.