Just who is Hassan Ali Khan?

The country's highest court -- the Supreme Court of India -- on Tuesday mulled invoking terror and other stringent penal charges against Pune stud-farm owner Hassan Ali Khan who has been accused of massive money laundering and tax evasion and for his alleged links with arm dealers and people linked to terror activities.

So just who is this mysterious Hassan Ali Khan? How did he manage to become India's largest tax defaulter with dues allegedly over Rs 50,000 crore (Rs 500 billion) Read on to find out. . .

Hassan Ali Khan is a Pune-based stud farm owner, but says that he is a scrap dealer with an annual income of Rs 30 lakh (Rs 3 million).

However, the fact that he throws lavish parties, owns many super expensive cars, has a stud farm, dabbles in horse racing and has several properties in major Indian cities do not gel well with his claims of his annual income.

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He was the main accused in a case involving alleged money laundering to the tune of $8 billion (Rs 39,120 crore), and suspected tax evasion.

The Mumbai Income-Tax department had sent him a notice demanding Rs 50,000 crore (Rs 500 billion) for not disclosing funds in several foreign bank accounts, including $8 billion in an account in UBS AG, Zurich.

He is said to be the country's highest tax defaulter with dues allegedly over Rs 50,000 crore.

This tax liability of Hassan Ali was confirmed by the government on August 4, 2009. The government, while disclosing the list of tax defaulters in the Rajya Sabha, stated that Hassan Ali Khan topped the list of tax defaulters with outstanding arrears of 'more' than Rs 50,000 crore.

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The government had said that the dues, if interest for belated payments was included, exceeded Rs 70,000 crore (Rs 700 billion)!

Khan's father was an excise officer. Hailing from a Hyderabadi family based at Musheerabad, Hassan Ali has a brother and four sisters.

How Khan came into big money is not very well known, but it is said that before becoming a 'scrap dealer' he tried out his hand at many things: he was into the antiques trade, then he dabbled in a bit of finance. . .  he is even said to have allegedly conned people into believing that he was a descendant of Hyderabad royal Nizam family.

Later he entered racecourses, getting into horse racing big time -- in Pune and Mumbai. Once his racing business began to work, he moved to Pune with his current wife Rheema with whom he is often seen at the races.

His first wife was Mahboobunnissa Begum, whom he divorced in 1999. Mahboobunnissa now lives with her two sons at Banjara Hills in Hyderabad.

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In March 2007, Hyderabad Police Commissioner Balwinder Singh had said at a press conference that two cases of bank fraud, four cases of cheating and a case of acid attack on a doctor were lodged against Hassan Ali in various police stations in Hyderabad.

According to senior police officials, in 1990, the manager of State Bank of India, Charminar branch, Hyderabad had lodged a complaint stating that Hassan Ali had fraudulently withdrawn a total of Rs 26 lakh (Rs 2.6 million) on three occasions against cheques that later bounced. A similar case was lodged for defrauding the Grindlays Bank.

In September 1991, the central government had announced an amnesty scheme wherein it allowed Indian citizens to get foreign exchange from outside. Subsequently at least four persons approached Hassan Ali, who promised them demand drafts in dollars.

He had allegedly collected Rs 10.35 lakh (Rs 1.035 million) from Suresh Mehta, Rs 6.29 lakh (Rs 629,000) from Rajesh Gupta, Rs 36 lakh (Rs 3.6 million) from T Ramnath and Rs 18.22 lakh (Rs 1.822 million) from P Rama Koteswara Rao.

He then produced 'international money orders' and handed over demand drafts to them to encash the dollars. However, the customers found the DDs to be fake and lodged complaints with the police in 1992.

The Hyderabad City police had arrested Hassan Ali twice between 1991 and 1992, once for allegedly cheating the State Bank of Hyderabad and the next time for duping private persons.

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The police had caught him in 1991 with the help of Interpol and the Canadian police for cheating the SBH. On the pretext that his mother was ill in Toronto, he had fled to Canada after a case was registered against him.

The Hyderabad police had alerted Interpol about Hassan Ali and they informed the Toronto police who arrested him and brought him to Mumbai, after which he was taken to Hyderabad. Subsequently, he was acquitted.

He is said to have been picked up by the police from Mumbai again in 1992, brought to Hyderabad and remanded to judicial custody in one of these cheating cases. The police had seized four cars, including a Mercedes, from him. He went free, however, since the victims did not come forward to pursue the cases against him.

The oldest case against Hasan Ali pertained to an acid attack on a doctor, his neighbour, in 1984. Dr P Niranjan Rao's face was disfigured and he had to undergo 30 surgeries. Since the police could not trace the records relating to the case, it is not clear whether Hassan Ali was arrested and acquitted in this case.

Ties with arms dealer Adnan Khashoggi

The ED is said to have traced Hassan Ali's relationship with infamous arms dealer Adnan Khashoggi. Adnan Khashoggi is said to have transferred $300 million from his Chase Manhattan Bank account in New York into Hassan Ali's UBS account in Zurich. But the Swiss bankers froze the account saying that the funds were from weapons sale.

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Khan merely a conduit for politicians?

Many media reports say that the billions of dollars that he allegedly deposited in Swiss banks actually belonged to influential politicians and industrialists and he was only a conduit who helped facilitate the transfer of the funds from India. In the bargain he got a hefty commission.

The Enforcement Directorate had sought details of Khan's accounts from Swiss banks in a letter rogatory issued in 2007. But the Swiss refused to share information on Khan, citing a technical point saying that not filing tax returns in India was not an offence under Swiss law.

Khan on February 18 had appeared before Income Tax authorities, apparently in connection with notices issued to him over huge tax evasions.

The I-T department had sent a show-cause notice on December 31, 2008 to Khan, demanding Rs 50,000 crore in taxes from him for not disclosing funds in several foreign bank accounts, including $8 billion in an account in the Zurich branch of UBS.

However, the UBS bank had recently denied any business relationship with Khan.

Though IT officials said Khan was present in the Assessment wing of their office at Churchgate in Mumbai and his statement was being recorded, they did not immediately confirm if he had appeared in connection with the 2008 notice or any other that might have been issued to him before or after that.

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Earlier, in January 2007, the I-T department had raided Khan's residence at Koregaon Park in Pune and had seized documents that showed that he had $8.04 billion in a UBS account in Zurich.

The raid followed a revelation that Khan had allegedly concealed his income and not filed income tax returns since 1999. The I-T department had also raided his properties in Mumbai and Hyderabad.

Taken for medical check-up

The 56-year-old Khan was taken to the JJ hospital, Mumbai, on Tuesday for a routine medical check-up after his arrest here.

Khan was arrested on Monday night by the Enforcement Directorate which carried out searches at his Pune home and that of his associates' premises in several cities, cracking the whip to meet Tuesday's Supreme Court deadline.

He was brought to Mumbai later and was grilled by the Enforcement Directorate for nearly six hours before being put under arrest.

ED officials took him to his posh house in Peddar Road in South Mumbai where he was quizzed till 10.30 pm before taking him to the their headquarters at Nariman Point.

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Enforcement Directorate officials from Mumbai also went to Pune to search the premises of Khan in posh Koregaon Park area on Tuesday. Searches were carried out at the premises of Khan and his associates at Pune, Mumbai, Gurgaon, Kolkata and Hyderabad.

"I am innocent. I haven't done anything wrong," he told reporters before entering the ED office.

In Kolkata, searches were conducted at the residence of businessman Kashinath Taparia. ED sources told PTI that Taparia was an alleged aide of Khan but Taparia claimed he had no "partnership" with him at all.

ED sources had said the statement of Khan's associate and hotelier Philip Anand Raj was being recorded in Delhi.

Khan's lawyer R K Gaur said he is being taken to ED's Mumbai office for further interrogation and to possibly confront him with "some documents."

Khan's arrest came on the eve of the Supreme Court's March 8 deadline to the government to inform it how it proposed to tackle black money hoarders.