Posted: Fri, Mar 25 2011. 1:00 AM IST

http://www.livemint.com/2011/03/24220505/Tapuriah-arrested-in-black-mon.html?atype=tp

A Mumbai court on Thursday remanded Kashinath Tapuriah, a Kolkata-based businessman and a close associate of Hasan Ali Khan, to Enforcement Directorate (ED) custody till 30 March. Khan is accused of laundering money to the tune of $8.04 billion (Rs.36,019 crore).

The ED, which investigates violations of foreign exchange norms, arrested Tapuriah early on Thursday in Mumbai after three days of questioning.

Tapuriah was later produced before a sessions court where ED had asked for his custody for 14 days. The agency got six days of custody.

A senior ED official who is investigating the alleged violations of foreign exchange laws said the investigation agency has found out that Tapuriah is the “main man behind Khan” and “was using Khan as a front”. He declined to be named as the investigation is not yet over.

The ED remand application against Tapuriah, a copy of which has been reviewed by Mint, said he had “actively assisted Khan in his money-laundering activities” and was acting as an “advisor” to Khan.

This move by ED comes four years after the income tax department first searched Khan’s premises and found incriminating documents against both Tapuriah and Khan.

The investigative agency sprang into action earlier this month after the Supreme Court asked the government why Khan was not being interrogated in custody during the hearing of a petition filed by lawyer Ram Jethmalani and some former bureaucrats seeking the court’s direction to the government to bring black money—to the tune of $1 trillion, according to some estimates—back to the country.

The remand application said Tapuriah had during his interrogation stated that Khan had links with Saudi arms dealer Adnan Khassoggi and “admitted that he was helping Khan to get hold of this money linked to Adnan Khassoggi”.

Khan, 59, was arrested by the agency on 7 March on charges of stashing huge amounts of black money in banks abroad. He is also facing a Rs.71,874 crore tax demand notice from the income tax department.

Another ED official, requesting anonymity, said the directorate has found applications by Khan and his wife to reside in Switzerland, along with other documents with details of their assets.

According to the remand application, Tapuriah along with his “henchman” Amalendu Pandey had helped Khan “acquire a second passport and travelled with him clandestinely to Singapore to open a foreign account in SBC (Swiss Bank Corp.) Singapore, which was subsequently used for money laundering”.

Khan has also revealed to the ED that Tapuriah is the “beneficial owner” of two firms Paysons and Autumn Holding and has accounts in UBS AG and Standard Chartered Bank.

“As per the statement of Khan, who is the authorized signatory in these companies, substantial amount is stacked in these accounts which has been generated by indulging in criminal activities—undervaluation in the import of machines by Indian companies,” the remand application said.

It also said, “Tapuriah extensively travelled abroad with Khan to Switzerland, London, Dubai, Singapore and other countries to facilitate the money laundering activities of Khan.”

Meanwhile, Khan’s chartered accountant, Sunil Shinde, has been asked to appear before the ED for questioning.

Khan’s ED custody ends on Thursday night. He will be produced before a court in Mumbai on Friday.

The I-T department has raised a tax demand of Rs.591 crore against Tapuriah and Rs.20,540 crore against his wife Chandrika Tapuriah.