Pune tycoon may face Rs 1 lakh cr fine for acquiring Rs 36,000 cr

MUMBAI: The Enforcement Directorateissued a show-cause notice to Pune businessman and racehorse owner Hassan AliKhan on Tuesday under the Foreign Exchange Management Act for allegedlyacquiring Rs 36,000 crore illegally. The ED���s probe has apparentlyindicated that the portfolio manager of arms dealer Adnan Khashoggi dealt withKhan extensively in one of his Swiss accounts. (Watch)UnderFEMA, the maximum penalty imposed can be three times the amount involved. Ifimposed in this case, it would be over Rs 1 lakh crore.The SCN,signed by ED���s special director K Nageshwar Rao, was issued atKhan���s Koregaon Park house at Pune and his Pedder Road residence in Mumbaieven as ED officers are questioning him at Arthur Road Jail in a moneylaundering case also registered against him. Pune businessman andracehorse owner Hassan Ali Khan was raided by the Income Tax department, Mumbaiin 2007 and found to be operating a bank account in UBS, Zurich with a sum ofover $8 billion. That raid spawned a host of investigations against Khan. Thedocuments of the account were recovered from his Pune house. Estimates of thetotal Indian money stashed away in Swiss banks is around $1,410billion.The ED has traced Khan���s alleged transaction withAdnan Khashoggi through a notarized statement of Khan signed on 29 June, 2003 inLondon. The document contains a letter written by Khan to Prabhu Guptara,director, Organizational Development, Woflsberg Executive Development Centre,Switzerland (a subsidiary of UBS), explaining why one of his Swiss accounts hadbeen tagged with the remark: ���Funds from weapons sales���, and hadbeen made inoperable.The letter explained the circumstances in whichKhan first opened an account with UBS Singapore in 1982 with $1.5 million,through Retro Hartmann of UBS Singapore and then how allegedly Dr Peter Weilly,porfolio manager of Khashoggi, virtually took over as his manager. Khan hadreceived $300m in this account allegedly from Khashoggi���s Chase Manhattanbank account in New York.After the document was notarized by a UKnotary on June 29, 2003, Khan seems to have allegedly reported his Indianpassport as lost in London and acquired a new passport there. A copy of thefirst page of the old passport is enclosed with the notariseddocument.The probe has also thrown up ���evidence��� againstKhan���s associate Kashinath Tapuria, who has said that two politicians, oneof them a senior Congressman, had referred Khan to him during his days offinancial difficulties.