The Enforcement Directorate logo.
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Srinagar: The Enforcement Directorate (ED) has arrested former J&K Co-operative Bank chairman Mohammad Shafi Dar in connection with a Rs 250-crore money laundering case in Jammu and Kashmir, officials said on Friday.
Dar was arrested along with Mohammad Hilal A Mir, the chairman of the River Jhelum Cooperative Housing Building Society, a 'fictitious firm', and they will be presented before a special court, according to the officials.
The ED had conducted searches, including at Dar's residence, in connection with the case on Thursday, and these resulted in recovery of incriminating evidence, they claimed.
The fraud was done in the name of the 'fictitious' River Jhelum Cooperative Housing Building Society, the officials said.
The raids were conducted by the ED's office in Srinagar under powers provided to the agency under the Prevention of Money Laundering Act (PMLA) for search and seizure, they said.
In August 2020, the Jammu and Kashmir Anti-Corruption Bureau (ACB) had filed a charge-sheet in the case against Mir, Dar and others for offences under the Indian Penal Code and the Prevention of Corruption Act.
Mir had moved an application to the secretary cooperatives, administration department of cooperative societies, seeking directions to the J&K Co-operative Bank for granting financial assistance to the tune of Rs 300 crore for taking over possession of 37.5 acres of land in the outskirts of Srinagar for construction of a satellite township, according to the probe by the ACB.
The application was endorsed to the registrar of cooperative societies, Jammu and Kashmir, for taking up the matter with the J&K Co-operative Bank.
In the ACB probe, it was found that accordingly, the J&K Co-operative Bank in Srinagar sanctioned a loan to the tune of Rs 223 crore, without adhering to any codal formalities, including obtaining details of the society such as its balance-sheet, profit and loss, account business, activities, PAN number, income tax returns, and construction of board resolutions.
The inquiry revealed that the River Jhelum Cooperative House Building Society had not even been registered with the registrar of cooperative societies, and Mir by acting in league with Dar and others had prepared a fake and fictitious registration certificate in the society's name and managed the loan's sanction.
The loan amount was disbursed into the accounts of land owners but the land had not been mortgaged to the bank, it found.
Further, the investigation conducted by the ACB was successful in unearthing the siphoned-off Rs 223 crore. Also, an amount to the tune of Rs 187 crore has been frozen by the bureau, the officials said.