ED slaps Rs 62 lakh penalty on Watali

The Enforcement Directorate has slapped Rs 62 lakh penalty on Kashmiri businessman Zahoor Ahmad Shah Watali, who is facing terror-funding charges, on charges of violation of foreign exchange rules and operating bank accounts using fake NRI credentials.

According to an ED statement on Friday, the adjudication authority under Foreign Exchange Management Act,1999 has held Watali guilty for contraventions of provisions of FEMA and imposed the penalty for operating Non-Resident Rupee (NRE) and Non-Resident Ordinary Ruppe (NRO) accounts in HSBC Bank in New Delhi in "unauthorised" manner.

As per FEMA guidelines, it is illegal for NRIs to have saving accounts in their name in India. It is mandatory that one convert savings earned abroad to a Non-Resident Rupee (NRE) or Non-Resident Ordinary Ruppe (NRO) account. Continuing to use the savings account can attract hefty penalties.

The ED started an investigation against Watali following inputs about "certain suspicious" foreign exchange transactions and investigators claimed they found that Watali was maintaining non-resident saving accounts in the HSBC bank in Greater Kailash.

While opening these accounts, the ED said, Watali has submitted a copy of the passport issued at Washington and resident visa among others claiming himself as an NRI. However, it said, during this period he neither remained outside India for more than 182 days in the preceding financial year nor was his intention to remain outside India for an uncertain period.

"During the period 2003 to 2009, Zahoor Ahmad Shah Watali received inward remittances to the tune of Rs 62,93,711 (Rs 62.93 lakh)...He continued holding of the accounts and allowed remittances in this account and thereby contravened" the provisions of FEMA, it said.

Watali is already under the scanner of the NIA and ED on charges of alleged terror funding and his purported links with banned Pakistan-based terrorist outfit Lashkar-e-Taiba and its chief Hafiz Saeed. Assets worth Rs 8.94 crore of Watali in Srinagar (Jammu and Kashmir), Gurgaon and other locations have been attached by the ED till now.