Delhi blast: Al-Falah chairman Jawad Ahmed Siddiqui arrested by ED over alleged money laundering

New Delhi: Al-Falah Group Chairman Jawad Ahmed Siddiqui was arrested by the Enforcement Directorate (ED) on Tuesday after day-long searches at premises linked to the group-run university, which is facing scrutiny following the involvement of some of its faculty in suspected terror activities, threw up evidence of alleged money laundering.

Siddiqui was taken into custody under the Prevention of Money Laundering Act (PMLA) in the evening following the searches that started at 5:15 am. The ED seized around Rs 48 lakh in cash during the searches at 19 premises of the Al Falah Trust and university, including key personnel overseeing its finance and administration.

The action came days after Home Minister Amit Shah ordered a forensic audit of records of Al Falah University as well as an investigation by the ED and other financial investigating agencies into the dealings of the Trust that ran Al Falah University, a private university in Dhauj village in Haryana’s Faridabad, a satellite town of Delhi.

The ED registered a case of money laundering based on two FIRs filed by Delhi Police's Crime Branch, accusing the university for making “fraudulent and misleading” claims of having accreditation by the National Assessment and Accreditation Council (NAAC) and recognition from the UGC with an “oblique motive to cheat” the public.

According to ED officials, Siddiqui is the Managing Trustee and he effectively controlled the institutions under the Al Falah Trust. It said the Group has seen a “meteoric rise” since the 1990s. However, the ED said, the rise is not backed by adequate financials and investigations have claimed that large amounts of proceeds of crime have been generated.

Investigations have collected evidence about “diversion” of crores of rupees by the Trust to family-owned entities, citing examples of giving contracts for construction and catering to Siddiqui’s wife and children. Multiple shell companies of the group have been identified, the officials said.

“Exhaustive evidence, including recovery of cash from trustees’ diversion of funds to family concern, layering of funds etc, clearly establish the pattern of generation and layering of proceeds of crime,” they said. Officials said they were examining details of at least nine shell companies registered at a single address and linked to the group.

Investigators claim that these companies exhibit shell-company like peculiarities, including no physical presence, no meaningful activities at declared places of business and common mobile number and email across various companies and accounts.

The EPFO/ESIC filings of the Trust and other entities are inconsistent with reported scale of operations and overlapping of directors/signatories and weak KYC trails across entities, the officials claimed.

Instances of minimal salary disbursal through banking channels, absence of HR records, synchronised incorporation patterns and common contact coordinates across firms have been detected, they claimed.

Al Falah University was established by the Haryana Legislative Assembly under the Haryana Private Universities Act and the Al Falah Medical College is also affiliated to the university.

In a statement last Wednesday, the Al-Falah University said it has no connection with the arrested doctors apart from their professional assignment and debunked allegations on social media that the campus was used to store explosives.

Vice Chancellor Bhupinder Kaur Anand said the varsity is "extending its full cooperation" to the investigating authorities to enable them to arrive at a "logical, fair and conclusive determination" in the matter pertaining to national security.