TRIVANDRUM, 27 October 2004 — The Enforcement Directorate has arrested seven people in connection with the transfer of 7 billion rupees in unaccounted money during 2000-2004 to Kerala amidst opposition allegations that it was meant for funding subversive activities across India.
They were booked under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, the ED informed the state police yesterday.
Seven others facing the same charges are at large and some of them might have already fled the country, it said in a communication to Director General of Police Hormese Tharakan.
Altogether, 38 people connected with the transactions have been served with notices. Police suspect involvement of drugs, arms and gold though a major chunk is believed to have changed hands in real estate deals.
Refuting opposition charges, A.K. Antony, who quit as chief minister two months ago, said Vigilance and Anti-Corruption Bureau (VACB) and Crime Branch police were investigating the cases after the Reserve Bank of India directed the state government to probe the roles of Kerala bank employees in the large-scale fraud that began in 2000.
“Since interstate gangs are suspected in the case, we have only a limited role in the probe. The primary responsibility lies with the federal government and its agencies,” he said.
Hawala transactions of seven million rupees were reported in 2000 and 620 million rupees were brought in a year later by misusing the export incentives. The illegal transactions multiplied to 3.36 billion rupees two years later and it touched an unbelievable seven billion rupees this year as the investigation agencies still have no clue to where all the money has gone.
“There were allegations that one of my Cabinet colleagues was involved. That too is under investigation,” Antony told reporters here.
Opposition leader V.S. Achuthanandan, meanwhile, demanded the hawala payment be probed jointly by federal and state agencies. He also wanted a probe into the alleged role of ruling United Democratic Front (UDF) coalition leaders.
The government had entrusted the probe to a Joint Task Force of various state and federal intelligence agencies as revenue intelligence failed to give any tips.
Preliminary inquiry by the state intelligence found millions of rupees transferred to some of the Hindu, Muslim and Christian organizations. But the ED has so far no evidence that the money was used for promoting religious fundamentalism. Police say chances of routing money to finance terror elsewhere through communally peaceful Kerala could also not be ruled out.
Hormese Tharakan said terrorist outfits in other states might have their links in Kerala, and it was being closely monitored.
