ED arrests Kashinath Tapuriah to investigate whether his frequent overseas trips with Hasan Ali Khan were made to negotiate clandestine business deals

THE Directorate of Enforcement (ED) arrested Kolkata-based consultancy firm owner Kashinath Tapuriah, a suspected aide of Hasan Ali Khan, in connection with the country's biggest tax evasion case.


ED officials arrest consultancy firm owner Kashinath Tapuriah in connection of his frequent trips abroad with Hasan Ali Khan

The ED sought Tapuriah's custody to investigate his frequent trips with Khan to Singapore, Dubai, London and Switzerland and whether the trips involved negotiating clandestine business deals.

He was remanded to ED custody till March 30 after he appeared before the Principal Judge at the Sessions Court last afternoon.

"In his confession (copy with MiD DAY), Tapuriah said he was introduced to Khan by one A S Choudhary and Member of Parliament Vijay Bhaskar Reddy of Andhra Pradesh. Khan claimed to be a nawab and the grandson of the Diwan of Hyderabad.

We are investigating these statements and also whether the duo were involved in scrap trading for SAIL in Dubai," said a senior ED officer.

Aircraft deal

Tapuriah had come under the ED scanner after his firm, Kolkata-based RM Investments & Trading Company Private Ltd (RMI), was hired by an American aircraft manufacturer for the sale of commercial aircraft in India. The firm had allegedly sold three aircraft to state-owned airlines at heavily inflated rates.

Documents available with MiD DAY indicate that ED's erstwhile assistant director Arvind Kumar Singh had summoned Tapuriah in connection with the aircraft deal in 2007.

This was after Khan's questioning in late 2006.

Tapuriah told ED officials on January 13, 2007 (copy with MiD DAY) that the purchase price of each aircraft escalated fromu00a0 $90.7 million (including a 5 per cent commission paid to the Indian agent) to $98.3 million, without commission a difference of $7.6 million or Rs 34 crore.

The real escalation, excluding commission, was from $80.6 million to $98.3 million or nearly Rs 79 crore giving the company a profit of 25 per cent in a single deal.

RMI contacted the American aircraft company to pay the commission under the Consultant Service Agreement, but payment was rejected on the ground that it would be in violation of the policies of the state-owned airlines.

Investigators suspect Khan was part of the deal and the kickbacks were transferred to overseas banks. His and his wife Reema's bank accounts in the country showed a phenomenal rise just after the deal and then the money went 'missing'.

ED has booked a case against Khan under the Prevention of Money Laundering Act, 2002, and investigations are on to recover the nearly Rs 36,000 crore he is believed to have stashed in foreign banks.