Enforcement Directorate Seeks Permanent Confiscation of Rs 700 Crore Assets Linked to Late Drug Smuggler Iqbal Memon
In a significant legal move, the Enforcement Directorate (ED) has approached a special Prevention of Money Laundering Act (PMLA) court under the Fugitive Economic Offenders Act (FEO) to permanently confiscate 15 high-value assets valued at approximately Rs 700 crore. These properties are associated with the late drug smuggler Iqbal Memon, also known as Iqbal Mirchi, and his family members, located in Mumbai and Dubai.
Details of the Assets and ED's Allegations
The plea specifically targets properties in Worli, Mumbai, including Rabia Mansion, Marium Lodge, and Sea View properties. Additionally, it encompasses around 15 assets in Dubai, such as the Hotel Midwest Apartment in Bur Dubai and numerous commercial and residential units in Business Bay and DEC Towers. The ED has alleged that the Memon family acted as the beneficial owners of these properties, utilizing trust entities in India and corporate holdings in Dubai to disguise illicit wealth as legitimate assets.
The ED stated in its plea: "The fugitive has refused to come to India and he has already been declared a Fugitive Economic Offender. The case has international ramifications and, as observed by the Supreme Court, economic offences are grave and need to be viewed seriously. It is prayed that the accused be dealt with strictly and an order for confiscation of the assets be issued."
Historical Context and Legal Proceedings
Tracing back to 1986, the ED's investigation revealed that Mirchi originally acquired the Worli plots from the Sir Mohammad Yusuf Trust for Rs. 6.5 lakh through a partnership firm. To evade government attachment, a 'Caretaker Agreement' was allegedly fabricated in 1991, allowing the trust to appear as the owner while Mirchi retained actual control. Currently, these plots, covering nearly 5,000 square meters, are valued at Rs 497 crore.
In 2021, the court declared Mirchi's wife Hajra and sons Asif and Junaid as fugitive economic offenders under the FEO Act after they failed to return to India despite summons in the money laundering case. Under this Act, the court is authorized to order the confiscation of properties. On Wednesday, the court heard arguments from ED's special public prosecutor Sunil Gonsalves, with proceedings set to continue on April 7.
Dubai Assets and Alleged Nexus
The ED highlighted the family's extensive real estate portfolio in Dubai, funded by money siphoned from illicit activities. The most expensive asset is the Hotel Midwest Apartment in Bur Dubai, valued at AED 9.3 crore (approximately Rs 233 crore). Ownership is split among family members, with Junaid and Asif each holding a 40% stake and Hajra holding the remaining 20%.
Furthermore, the ED alleged a suspicious nexus involving DHFL promoter Dheeraj Wadhawan and the Memon family. The ED submitted: "Payments to the tune of Rs 154 crore were made overseas to Iqbal Mirchi by Wadhawans for acquisition of Sea View properties. Dheeraj Wadhawan also transferred 14 commercial and residential units to Asif Memon at a price of AED 4.5 million (approximately Rs 11.28 crore) against the prevalent market value of AED 13 million (approximately Rs 32 crore) from Dheeraj & East Coast LIC, a company owned and controlled by the Wadhawans, to settle various issues in finalizing the deal."
The portfolio also includes four residential units in DEC Towers, located in the Marsa area of Dubai, allegedly transferred to Asif in 2015 by Dheeraj & East Coast LLC without any consideration, with a combined valuation of Rs 6.08 crore.
Conclusion of Investigation
The ED concluded that, although certain properties are registered in the name of Sir Mohammad Yusuf Trust and Dubai-based assets are under the names of Asif, Junaid, and Hajra Memon, the investigation has conclusively established that these entities and individuals were merely fronts, proxies, and vehicles used for acquiring, layering, holding, and enjoying proceeds of crime generated from the illicit activities of late Iqbal Mirchi alias Iqbal Memon.
