J&K’s Terror Funding Problem as NIA Extends Custody of Accused

The 9 men who were arrested by NIA in Delhi on 7 November, will be in judicial custody till Wednesday, 30 November.

Image of Hurriyat leaders linked with terror funding in the Kashmir Valley used for representational purposes.

(Photo: Liju Joseph / The Quint)

Jammu and Kashmir may have seen a decline in violence since 2001, as reported by The Kashmir Herald, but there is enough proof that terrorism continues to thrive in the state, due to a steady flow of funds to terror networks. Not even heightened global surveillance has managed to stop the flow of finances for jihad in J&K. An estimated Rs 25-crore to Rs 30-crore is allegedly transferred to separatists and militants each month from Pakistan, as told to the South Asia Intelligence Review by security forces.

On 7 November, the National Investigation Agency (NIA) seized over Rs 36-crore in demonetised currency from a gang of nine people in Delhi after arresting them. During the investigation, it was revealed that the gang bought the old currency at 10-40 percent of its original value, from all kinds of different sources, spending between Rs 3.6 and 14.4 crore on the purchase.

According to the NIA, these nine persons were put under surveillance in the Jammu and Kashmir terror funding case, when they were intercepted while talking to separatist leaders. A Delhi Court, on Tuesday, 21 November, extended their judicial custody till Wednesday, 30 November.

Also Read: NIA Seizes Rs 36.35 Crore in Old Notes in J&K Terror Funding Case

Who are These Nine Men?

(Infographic: Rahul Gupta/The Quint)

The nine men arrested by the NIA for their alleged terror-funding activities hail from Mumbai, Delhi, Srinagar, Pulwama, Anantnag and Amroha. The NIA says that seven of the nine had been working in close coordination – most were businessmen but some were also hawala transactors.

However, the key accused in the case is an assistant sub-inspector Bhagwan Singh.

The accused were found carrying 28 cartons filled with demonetised Rs 500 and Rs 1000 notes in four luxury vehicles. However, it is still not clear where were they heading to with these old notes.

Also Read: NIA Arrests Kashmiri Tycoon Zahoor Watali in Terror Funding Case

How Did This Case Unfold?

After 20 July, the Reserve Bank of India (RBI) stopped accepting old notes from everyone, including the NRIs and banks. The question is, why would anyone spend crores to buy notes of no value?

The NIA had confirmed that, during the interrogation of the apprehended, the names of a few bank officials did emerge in association with the case. However, the NIA refused to share the names of these banks and bank officials.

When trying to explain how bank officials could be involved, the agency said banks are still in possession of old currency notes, which are kept in chests. Perhaps, as one official suggested, bank officials were in connivance with the gang members and planned to simply add this cache of old notes to the existing chests and get them exchanged by the RBI.

But the RBI counts and records the old currency that goes into these chests, so the addition of old notes by compromised bank officials would be easily detected.

When an NIA officer was asked how bank officials could exchange old notes for new ones without the involvement of RBI officials, he evasively said, “So far, no involvement by RBI officials has been found.” He quickly added, though, that the probe was still on, and it was still possible that more people could be involved.

Certainly, in such a scenario, changing old notes to new currency would not be possible without the involvement of a senior RBI official.

We will question the bank officials named by the arrested accused to unravel the entire modus operandi. Currently, we are not ruling out anyone’s involvement. 

Senior Officer, NIA

The NIA would not have been able to seize this huge amount of demonetised currency had the accused’s calls not been intercepted in the course of investigating the J&K terror funding case.

Who are the Key Players Allegedly Involved in Funding Terror in J&K?

1. Kashmiri businessman Zahoor Watali: The NIA, on 17 August, arrested Kashmiri businessman Zahoor Watali in Delhi, for his alleged involvement in a terror funding case. The agency had carried out raids on the businessman’s premises. The NIA said in a statement:

The searches have unearthed highly incriminating material pertaining to the receipt of funds by Zahoor Watali from foreign sources and its further distribution to terrorists and separatists in Kashmir Valley for anti-India activities.

It said that on 3 June 2017, the NIA had searched Watali’s house in Srinagar and seized incriminating documents pertaining to financial transactions and land deals.

2. A former Director General of Police (DGP), Punjab: On 3 August, The Quint reported that an Indian Police Service (IPS) officer of the J&K cadre, batch 1974, who had held senior positions before his retirement as Punjab’s DGP in 2012, had dramatically emerged as the ‘collaborator’ and ‘partner’ of Zahoor Watali.

This was revealed during the NIA probe at the time, into the money allegedly received by separatists through hawala and other illegal channels. The retired IPS officer hailing from Punjab has served as DIG Srinagar and IGP Kashmir twice before heading the State Vigilance Organisation and holding other DGP rank positions in J&K until June 2009, when he was appointed as DGP in the Shiromani Akali Dal (SAD) government of the then chief minister Parkash Singh Badal.

3. Hizbul Mujahideen chief Syed Salahuddin's son Syed Shahid Yousuf: The J&K government, on 2 November, suspended Hizbul Mujahideen chief Syed Salahuddin's son Syed Shahid Yousuf from his agriculture department job, ten days after he was arrested by the NIA in an alleged terror-funding case, reported PTI.

Yousuf, 42, was posted as agricultural assistant in Budgam of central Kashmir when he was arrested by the NIA on 24 October.

4. Separatist leader Syed Ali Shah Geelani’s sons: The NIA questioned pro-Pakistan separatist leader Syed Ali Shah Geelani’s sons in connection with a terror funding probe on 9 August, allegedly involving Jamaat-ud-Dawa chief Hafiz Saeed, official sources told PTI.

5. J&K Deputy Superintendent of Police Faheem Ali: On 9 August, the NIA also questioned J&K Deputy Superintendent of Police Faheem Ali, who handles separatist leader Mirwaiz Umer Farooq's security, in connection with the case.

Ali is the first police officer from the state to be interrogated by the NIA. While Geelani's elder son, Nayeem, is a surgeon, his younger son, Naseem, is a state government employee.

Prominent Terror-Funding Raids by NIA

6 September: NIA officials raided 11 locations across Srinagar and Delhi on 6 September morning, in a probe that began the previous day. Laptops, mobile phones and hard drives were seized during the searches, as raid were conducted on traders allegedly engaged in hawala operations, using money to fund terror in J&K. These raids are part of an NIA probe in a 30 May case, in which the leader of Pakistan-based Jamaat-ud-Dawa and Lashkar-e-Taiba, Hafiz Saeed, was named as an accused.

16 August: Following a comprehensive enquiry into the inland and overseas funding to Kashmiri separatists and militants, the NIA carried out fresh raids at the residences of two officials of the J&K government, who are closely related to prominent businessman Zahoor Watali.

4 June: In a pre-dawn swoop, the NIA raided 26 locations in Kashmir, Haryana and the national capital on 4 June. The raids were in connection with a case of alleged funding received by separatist groups for carrying out subversive activities in the Valley.

(Sources: PTI, IANS, Hindustan Times)

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