The Enforcement Directorate (ED) on Friday claimed that Hilal Rather, the son of former Jammu and Kashmir minister Abdul Rahim Rather, "siphoned off" money loaned to his company to splurge on foreign tours and acquiring personal assets in India, Dubai and the US.
The central agency conducted raids at 17 locations in Srinagar, Jammu, Delhi and Ludhiana on Thursday in connection with a money laundering probe against the junior Rather linked to an alleged Rs 177 crore loan fraud involving Jammu and Kashmir Bank.
"Several incriminating documents and digital evidences have been seized during the search operations," the ED said in a statement issued on Friday. It said raids were carried out at the premises of Abdul Rahim Rather, a former minister of finance, agriculture and rural development of the erstwhile state of Jammu and Kashmir and a National Conference (NC) leader, in Srinagar and that of his son in Jammu.
"A substantial part of the loan was siphoned off by Hilal Rather by transferring the funds from the loan account of Paradise Avenue (his company) to various entities and re-routing the funds back to the firm's current account from where it was further withdrawn and transferred for purchase of movable and immovable assets in India, Dubai and the USA and also spent on foreign tours and other personal activities," the ED alleged. It added that three flats in the name of Hilal Rather and family members were "acquired in Dubai and one bungalow was acquired in the name of Hilal Rather and his wife in North Carolina, USA" by allegedly misusing the loan amount.
The central probe agency has filed a money laundering case against Hilal Rather and others, under the Prevention of Money Laundering Act (PMLA), taking cognisance of a case filed by the Jammu and Kashmir anti-corruption bureau against him. The CBI and the Income Tax Department too are probing him in this case.
The ED said its probe found that a loan of Rs 177.68 crore was sanctioned by J-K bank, without verifying documents and in violation of guidelines of RBI, to Paradise Avenue for construction of a residential housing project in Jammu. The CBI has alleged that Hilal Rather entered into a criminal conspiracy with the then officials of the Jammu and Kashmir Bank to get loans of about Rs 177.68 crore in alleged violation of rules and guidelines.
"The loans that were sanctioned for construction of flats were allegedly diverted and misappropriated by the accused using the bank accounts of his employees," the CBI had alleged. It was further alleged by the CBI that the accused submitted forged certificates and bills to the bank.
In a charge sheet filed before a special court in Jammu this March, the CBI had named two former branch heads of J-K Bank's New University Campus branch, Iqbal Singh and Arun Kapoor, apart from Hilal Rather. Detailing alleged omissions on the part of bank officials, the CBI had said they "did not" verify certificates and helped Hilal Rather in siphoning off the loan amount and laundering of money.
The I-T Department too had raided him in June last year on charges of alleged tax evasion. "During the search, it was detected that the tax evader (referring to Hilal and his group) has been given illegal benefit of Rs 60 crore by J-K Bank. His outstanding loan of Rs 190 crore was settled at Rs 130 crore, although he did not deserve any concessional treatment," the Central Board of Direct Taxes had then said in a statement.
The CBDT is the policy-making body for the I-T Department. Referring to Hilal, the CBDT statement has alleged that "he is also holding and operating a foreign bank account".
"Neither his interest in the Dubai company nor the foreign bank account has ever been disclosed by him in his tax returns," it had said. It added that Hilal Rather and his group "sold/booked part of his real estate project of Paradise Avenue near Jammu against unaccounted cash."
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