india

Updated: Oct 23, 2019 02:33 IST

The Enforcement Directorate (ED), investigating the property dealings of late gangster Iqbal Mirchi — a close aide of fugitive gangster Dawood Ibrahim — in a money-laundering case, on Tuesday arrested businessman Humayun Merchant, 70. The ED termed him a “frontman”, who was given power of attorney (POA) by Mirchi after the latter had fled the country. Later in the day, the agency arrested one Rinku Despande, for allegedly forging documents.

The ED alleged that Merchant “planted” tenants to purportedly usurp three immovable properties — Sea View, Marium Lodge and Rabia Mansion in Worli — belonging to the Sir Mohammad Yusuf Trust.

Merchant refuted the allegations in a special Prevention of Money Laundering Act (PMLA) court, saying his arrest was unsolicited.

According to the agency, in 1986, Mirchi purchased the three properties belonging to the trust, of which British national Haroun Yusuf was chairman, for ₹6.5 lakh.

At the time of sale, various tenants were occupying the buildings. However, Mirchi later fled the country. “From the list of tenants from 1981 to 2010 and from various statements recorded under PMLA, it is found that the initial tenants were replaced by Mirchi’s relatives/close associates and by 2005, almost all tenants were Mirchi’s nominees and were planted by Merchant in connivance with Yusuf,” the ED told the court in its remand report.

In 2005, confiscation under The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA), was quashed by a court on the ground that the properties belonged to the trust.

The ED also alleged that Merchant then facilitated the deal to develop these buildings located at a prime location in Worli. The agency stated in its remand report that Merchant initially approached a developer, Joy Home Creation Pvt Ltd, and assured him that the properties are free from being attachment by the government. Later, he arranged a meeting between Joy Home Creation’s director Jayesh Soni and Mirchi in London. “During the said meeting, various modalities about the project were discussed. After the approval of Mirchi, an agreement was established between Trust and Joy Home. Initially, five tenants were transferred,” the report stated. Mirchi, however, threatened Soni to exit the said property after he failed to pay ₹11 crore as promised.

Later in 2010, M/s Sunblink Real Estate Pvt Ltd entered into the project and a deal was struck for the surrender of tenancy rights in favour of Sunblink for ₹225 crore. According to the agreement, Joy Homes was to get ₹50 crore, trust ₹4.25 crore and the rest (₹170.75 crore) was to be paid to Merchant for the tenants represented by him. The ED probe revealed that cheques issued by Sunblink in favour of the tenants were encashed by opening bank accounts in similar names at Chennai. These accounts, which are under the scanner of the ED, were opened for a brief period of time, from where the agency believes money was transferred overseas to Mirchi.

The ED said Merchant was paid ₹127 crore and later, Sunblink acquired tenancy rights of all tenants. Of these, the agency has traced records of ₹60 crore paid by Sunblink, while “the rest appears to have been paid through hawala channels”.

ED alleged that Merchant has, however, admitted to have received ₹5 crore from Sunblink, and transferred the same to the accounts of Junaid, Mirchi’s son.

To everyone’s surprise, Merchant told court that he received ₹5 crore from Dheeraj Wadhawan, promoter of Dewan Housing Finance Corp. Ltd (DHFL). The DHFL has been searched by the ED last week for allegedly extending loans to Sunblink, which is suspected to have facilitated the routing of ₹2,186 crore to Mirchi in Dubai. Sources close to the company said that “statements from the accused should not be taken at face value. ED is carrying on with the investigation and the parties concerned are co-operating with investigators.” a source said, adding that Dheeraj has been ailing and currently hospitalised. “He will be giving his statement to ED, once he is out of hospital, to clear his stance,” said the source.

Merchant further told court, “I know Mirchi since childhood as we stayed in the same locality and my sister is married in his family. I have not given any POA. He requested me to arrange for tenancy and I only arranged for six tenants who were sons, their father-in-laws and their brother-in-laws.”

Merchant was remanded in ED custody till October 24. The agency on Tuesday evening arrested Deshpande, who was named by city-based businessman Ranjeet Bindra, already arrested in the case, as having contact with Mirchi. The ED has stated that Bindra brokered the deal of the three properties, while the delivery of the cheques of the deal was issued in favour of fake dummy tenants to Deshpande. She will be produced before a special court on Wednesday.