Hasan Ali Khan: Once known for fancy lifestyle, plagued by multiple cases later

Known for his love for racing horses and fancy cars, the once-flamboyant businessman spent the last six years of life battling multiple illnesses and several cases filed against him by various central agencies including the ED, Central Bureau of Investigation, Income Tax Department and police entities.

Khan, who died on Thursday at the age of 71, received no closure, legal or emotional, till his death, said people close to his family. His longtime lawyer Prashant Patil said Khan was in Hyderabad to visit his parents’ grave when he passed away late Thursday night.

Khan had spent the last few years in Pune, where he first hit the headlines in 2007 after being accused of laundering Rs 1.1 lakh crore and parking it in Swiss banks. The central agencies had also alleged that Khan had links with an international arms dealer, and even accused him of stealing a diamond from the Salar Jung Museum in Hyderabad. Most of these charges have either been proven to be false, or remained unsubstantiated, till his death.

In a rare interview with The Indian Express at his residence in Koregaon Park in 2018, Khan had said, “When my house was raided in 2007, I was in the headlines and the world called me the biggest money-launderer, based on fake reports.”

“Now, 10 years down the line, no one is asking why these agencies have been shying away from prosecution,” Khan had told this reporter.
Khan is from Musheerabad area of Hyderabad, where he lived with his parents, six sisters and a brother. His father was an employee in the Excise Department. As a young businessman, Khan is known to have tried out various ventures — he started a car rental service, ran a metal and scrap trading company, and started another finance firm that was later accused of cheating some banks. He had cases of cheating and forgery registered against him in the late 1980s and 1990s. According to people close to him, Khan moved the base of his various businesses to Pune around 2000. He was a regular visitor to race courses in Pune and Mumbai in the early 2000s.

Around 2006, a purported deal between Khan and Philip Anandraj, a Switzerland-based hotelier, came under the scanner of central agencies. In connection with the ‘deal’, the Income Tax department raided Khan’s Pune residence and other premises in 2007. Anandraj happened to be at Khan’s residence when the raids happened.

Among other things, the IT officials found a letter in Anandraj’s laptop, apparently issued by the Union Bank of Switzerland (UBS), mentioning that an account in Khan’s name had US$ 8 billion (over Rs 36,000 crore at that time) in deposits. From the money transfers to and from this account, as shown in the documents seized, the agencies also claimed a link with international arms dealer Adnan Khashoggi.

After the raids, the IT department proceeded to assess Khan from 2001-02 till 2007-08, and assessed his total income during this period to be a staggering Rs 110,412,68,85,303 (Over Rs 1.1 lakh crore). On the basis of the assessment, the department demanded a tax of approximately Rs 34,000 crore. The assessment made by the IT became one of the grounds for the ED to allege money laundering by Khan.

In March 2011, the ED arrested Khan under the provisions of Prevention of Money Laundering Act (PMLA). Khan was lodged in Arthur Road jail for four years and eight months. He was granted bail in August 2015 and had been living in Pune since then.

In a key turning point in the case against him, Swiss authorities found the UBS documents to be fake. In response to a letter rogatory from the Indian embassy in Berne, the Swiss Federal Office of Justice is said to have declared as forged the letter claiming deposits of US$ 8 billion attributed to UBS.

In February 2016, the Income Tax Appellate Tribunal passed an order setting aside the assessment of the ‘foreign income’ of Khan almost in its entirety. As a result of the tribunal’s judgment, the only tax liability confirmed against Khan was Rs 4 crore for an income of Rs 10 crore, as against the Rs 34,000 crore for an income of Rs 1.1 lakh crore, claimed by the agencies earlier.

Meanwhile, the ED had filed two separate ED cases, in 2011 and 2018, before a special PMLA court in Mumbai. The ED filed chargesheets in both these cases. In May 2022, charges were framed in the 2011 case, and Khan pleaded not guilty to them through video-conferencing. An ED chargesheet in one of the cases had accused Khan of the “theft of a diamond at Salar Jung Museum, Hyderabad,” adding that he had “sold the same in the international market for $700,000 and laundered the same in the name of a front company”. The museum and Hyderabad Police later clarified that no such diamond was stolen from there.

In July 2016, the Central Bureau of Investigation also filed a case against Khan and some unidentified government officials, alleging criminal conspiracy and corruption. Khan was interrogated in the case a few times by the agency.

Speaking to The Indian Express on Friday, Khan’s longtime lawyer Prashant Patil said, “Central agencies like ED are vested with enormous draconian powers. The case of Hasan Ali Khan is an example of… how agencies can ruin an innocent man’s life. Mr Khan was arrested and was behind bars for four years… his health deteriorated every day behind the bars… If this is a case of money laundering, then where is the money? If this was a very huge scam, why did the ED shy away from conducting the trial? As his lawyer, I shall pray to the special court to not drop the criminal proceedings against Mr Khan even after his death. Let the special court direct the ED to bring evidence to the court even now… the residential property of Hasan Ali Khan has been attached by ED. He is survived by his wife and a son, where are they going to stay now? The accused are arrested, the families are humiliated and outcast, the media trial confirms conviction without any evidence and one day the man dies without a free and fair trial.”