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His lawyer Mubin Solkar has filed a bail application.
Directing the prosecution to file its reply, the magistrate adjourned the matter to July 11 for arguments.
According to the police, his bank accounts had funds amounting to about Rs 50 million (Rs 5 crore) and Farooq had allegedly financed his brother's pilot training course abroad.
Police also claimed to have seized photographs of international terrorist Osama bin Laden and maps of the British parliament from some computer discs in Farooq's office.
Defence lawyer Mubin Solkar, however, denied that Mohammad Farooq had unaccounted wealth.
The accused was in the export business and was regularly filing his income tax returns, he said.
The court had earlier declared Farooq an absconding accused following which he surrendered before the court on June 21.
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