January 1998 News

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Hurriyat and Jamaatis Involved in Global Money Laundering Racket

15th January 1998

Another hawala scandal unearthed

The J&K police has unearthed a trans-national institutional covert funding network of Pakistan's ISI, designed to finance militancy in the state through hawala channels by diverting the funds through Kashmir Medicare Trust (KMT) and Muslim Welfare Society (MWS), front organizations of JEI.

Syed Salahuddin, the Pakistan-based supreme commander of Hizbul Mujahideen (HM), who divested funds received from Pakistan's ISI to Mohd. Shafi Mir, a Dubai-based businessman and Mohd. Nazir, a Kashmiri employed in the Pakistan Embassy in Jeddah, was the key initiator of the channel through which the funds were finally disbursed to the militant organizations, particularly the HM. Funding was also arranged by way of donations collected in the United States and Europe by Ghulam Nabi Fai (Kashmir American Council, Washington) and Dr. Ayub Thukar (World Kashmir Freedom Movement, London). Mohd. Nazir also received funds from Rabita-e-Islami and other Islamic organizations on the pretext of helping the needy and the destitute.

In the state, Abdul Gaffar Sofi, a JEI `sukun' and chairman of the KMT and MWS was the kingpin of the operation and frequently visited Dubai and Jeddah either to collect the funds directly or to channelise the payments to Delhi and Bombay through hawala transactions. In fact, during his last visit to Dubai in October 1997, he received Rs 50 lakhs sent by Salahuddin from Pakistan, part of which was brought by him in US dollars, which was later converted into rupees by money changers in Delhi. A part of this amount was later disbursed among the HM/JEI activists.

Shafi Mir, the owner of KM Carpets, Srinagar, was the main conduit for bringing money from Delhi to Srinagar. Hilal Ahmed Shah, owner of Shah Electrical, Srinagar, was an important member of the group. He was buying electrical goods worth Rs 30-40 lakhs per month from Delhi, the payment for which was arranged through fronts based abroad, and Hilal Ahmed Shah used to channelise this money to KMT and MWS as donations by a businessman to the supposedly philanthropic organizations. It is estimated that he siphoned off more than Rs 15 crore to KMT during the last one and a half years.

Although a number of other people are believed to be involved in the group, some have been apprehended during raids conducted on December 21, 1997. Those arrested include Abdul Ghaffar Sofi, Shafi Mir, Hilal Ahmed Shah and Ghulam Nabi Shaheen, an accounts officer in the accountant general's office in Srinagar. The possibility of involvement of senior Hurriyat leaders, including S.A.S Gillani and A.G. Lone in the group cannot be ruled out.

The JEI leaders have denounced the raids on its premises as violation of human rights. The blockade of this funding arrangement, however, is expected to result in a severe setback to the HM/JEI which have already been facing a financial crunch.


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