Kerala has had a long history of gold smuggling, going back decades. Over the years, the carriers coming from all walks of life have improvised their skill sets, finding stunningly original ways to bring in the contraband, in all shapes and forms, hidden in the most intriguing places including various parts of their body.
Though not claiming that long a history, a few pockets in Kerala, especially the Kannur-Kozhikode-Malappuram region and certain parts of Ernakulam and adjoining Idukki districts had spawned terror since the 1990s.
The early days saw Abdul Nasser Madani’s brand of radicalism that included planning and pulling off terror strikes like the Coimbatore blasts played hide-and-seek with political aspirations through his People’s Democratic Party. His camp follower Thadiyantavide Naseer never hid his true intent, forging ties with the dreaded Lashkare-Taiba. Since then, there have been numerous terror cases such as the infamous palm chopping case of 2010 that had NIA looking closely at Kerala.
But the tide really began to turn in mid-2016 when Kerala had to take cognisance of the tentacles of ISIS terror having reached the nooks and crannies of the state. From Padna and Trikkaripur in Kasargod, Yakkara in Palakkad, Thammanam in Ernakulam and Attukal in Thiruvananthapuram, the intelligence agencies traced 15 educated youth, including four Christian converts and one Hindu among the team of 15 who went to Syria to engage in jihad. Their route of travel to Syria was traced via Sri Lanka and Afghanistan. Many of them are reported to have been killed.
That was not the end as in 2017 a number of youngsters from Valapattanam in Kannur were found getting recruited by IS in Syria. Then again in 2018, the state woke up to another bout of IS recruitment from Wandoor in Malappuram. A year later came investigations into terror footprints linking the state and Easter church blasts in Colombo and other parts of Sri Lanka.
So far, the investigating agencies have failed to connect these two strands of anti-national activities – gold smuggling and terror links – in a significant way.
That is precisely what the National Investigation Agency (NIA) has set out to do from Day 1 of its engagement in the Thiruvananthapuram gold smuggling through diplomatic channel case that was officially busted on July 5.
The Customs Department, that apprehended the contraband and followed up with a series of arrests, has been elusive about the source of their alert that culminated in the bust. Meanwhile, the state police have started claiming as to how the whole case began unravelling after their periodic input to the central agencies such as the Directorate of Revenue Intelligence (DRI) and Enforcement Directorate (ED) about money trail leading to possible terror funding.
It was widely reported by the media from UP on January 27 that ED had submitted a report to Ministry of Home Affairs (MHA) on Kerala-centred Popular of India (PFI) mobilising funds to finance the cost of demonstrations and gherao against the CAA Bill till 6 January, 2020. ED is understood to have come across the information while investigating PFI’s role in an earlier case registered under the Prevention of Money Laundering Act. PFI had come out with a detailed rebuttal of ED’s charges which it said was false.
The ED had claimed to have found details of Rs 120.5 crore credited to accounts related to PFI, suggesting there was direct correlation between the dates of deposits and withdrawals from these accounts vis-à-vis the anti-CAA demonstrations in different parts of the country. One such payment found its way to an accused in a terror case, Abdul Samad, with roots in Mumbai who was arrested from Uttarakhand and taken into custody by NIA in February 2018 for his role in wide-reaching hawala operations and links to LeT.
“There are a number of instances with men from Kerala involved in cases like recruitment to IS, those with established links with LeT and many accused in terror cases across India. Apart from recruitment, their ground-level operations require serious money. Kerala police have cracked two IS recruitment-radicalisation cases and five cases are under investigation. And there have been a number of smuggled gold seizures we have done outside airports,” DGP-Kerala Loknath Behera told this correspondent.
Therefore, when the case of gold smuggling through the diplomatic route was busted on July 5, it appears the theory of the yellow metal being the new instrument of terror funding had already some traction among the intelligence agencies. This gives credence to the inference that the customs department was tipped off about the contraband gold coming in from Dubai. Sources say this gang had already smuggled in over 200 kg when the bust took place. Some say the gang led by Ramees KT (also arrested) was the man controlling the show and had access to Sarith PS and Swapna Suresh through Sandeep Nair. And the Dubai side of activities were handled by Faisal Fareed and Rabins Hameed, also from Kerala. Officers familiar with the probe fear 500-700 kg contraband gold would have been brought in by these players in the past one year.
In August 2019, the DRI arrested Rahul Pandit, inspector in the customs preventive division at Kannur airport for his involvement in gold smuggling at Kannur airport. Three other officers who assisted him too were held. Pandit was suspended from service, probe against others initiated. In November, 2019 the DRI arrested B Radhakrishnan, senior customs officer and former superintendent, Customs Air Intelligence Unit, Thiruvananthapuram on the charge of aiding and abetting import of large quantities of contraband gold through the international airport while manning the X-ray scanning machine. Again the volume of gold smuggled is put in excess of 500 kg before they were caught.
The sleuths are trying to separate the grains from the chaff – the large volume operations held together by operatives owing allegiance to organisations known to engage in anti-national activities and the regular carriers bringing in the contraband for shady jewellers. It is also suspected that all big operations had the same set of key players in the background.
In retrospect, it was no surprise that the MHA showed no hesitation in asking the NIA to investigate the gold smuggling case. Naturally, the inference can only be that NIA is working the case backwards towards funding of anti-national activities by connecting the dots. And hence its confident assertion in its remand petition filed before the special court in Kochi that the accused in the gold smuggling case were using the proceeds for terror funding. The state police brass admits the gold-terror nexus theory announced by the NIA was not implausible.
“Most terror outfits have sleeper modules in Kerala. This was the purpose behind reviving the Kerala Anti-Terrorism Squad last year, exactly along the lines of the NIA. That is why we have a dedicated unit within the ATS to track fund flow, mainly connected with gold and real estate. But we have limitations of jurisdiction and often need the help of central agencies. We already have shared a lot of data with NIA,” Behera said, adding there was a good likelihood that gold smuggling in Kerala has links with the sleeper cells of radical outfits with pan-India, even international footprint. And it is not surprising that links are emerging connecting terror funding with gold smuggling, as the yellow metal has always been a source for mobilising money, along with drugs and counterfeit notes. Clearly, those agencies involved in terror activities need funds to fight their court cases and other activities which cannot be raised only through donations, he said.
As per records available from sources in the Customs Department, the figures for gold seized in Kerala clearly indicate a rise in smuggling of gold. One of the reasons cited is the rise in import duty on gold from an already high 10 per cent to 12.5 per cent in 2019, apart from 3 per cent GST. The tax on gold in UAE at 5 per cent is perhaps the lowest in the world.
2019-20 – 540 kg (4 airports)
2018-19 – 251 kg (4 airports, Kannur started function in December 2018)
2017-18 – 103 kg (3 airports)
It has been the contention of some of the investigating agencies that smuggling cannot happen without the support officers in the Customs Department.
The state government has come under considerable heat because of the alleged involvement of Chief Minister Pinarayi Vijayan’s former principal secretary and top bureaucrat M Sivasankar with some of the accused in the gold smuggling case. Quick to distance itself from the likely political fallout, the state government suspended the officer. The NIA has got the custody of many suspects arrested by the customs department for gold smuggling. The agency also grilled Sivasankar for two full days this week.
Now, as the NIA tightens the screws and builds a watertight case by connecting the dots between gold smuggling and terror funding, there will be many casualties. Sure, the central agency sleuths are working the case backward, but there is nothing untoward in that as long as the basic premise is on solid ground. It may be a matter of time before it emerges that gold is the new instrument of transaction for terror, especially given the backdrop of meagre liquidity in the postdemonetisation days.
The big question is whether there will be a more comprehensive investigation that covers aspects that do not fall under the purview of the NIA. Because, the smuggled gold could also have gone as payment to officers and politicians for favours rented. Then, the investigation should bring under its purview corrupt practices allegedly followed in awarding lucrative contracts, loss to the state exchequer by way of appointing big consultants and the connection between these two strands.
Just as the NIA strives to link gold smuggling with terror funding, it will take the involvement of another agency like the Central Bureau of Investigation (CBI) to connect the dots. Because, there seems to be a lot of dubious looking dots that appear all over the place and this simply cannot be coincidental.
Kerala’s terror cases and NIA
Kerala has had a long tryst with the NIA right from the days of its inception following the 2008 Mumbai terror attack to combat terror in India. Founding Director General Radha Vinod Raju, though from the J&K cadre, hailed from Kochi. In that team, heading the terror financing and fake currency cell was another officer from Kerala cadre Loknath Behera, now DGP-Kerala.
NIA turned its lens on Kerala when Thadiyantavide Naseer with his LeT connections was found scouting for wannabe jihadis to fight wars in Iraq and Syria. It was NIA that busted terror camps in Vagamon, Narath and Kanakamala. By unravelling the deep-rooted terror links involving young couples getting converted the terror way to turn jihadis in distant lands, NIA ruffled the feathers of quite a few mainstream politicians in the state.
The special court for NIA cases convicted 13 of the 31 accused in the infamous `palm chopping case’ of July 2010 (members of the Popular Front of India had attacked T J Joseph, then professor at Newman College, Thodupuzha, and chopped off his palm for compiling a question paper that contained material insulting the Prophet). It was widely discussed as to how the masterminds walked free.
In November 2019, the NIA court in Ernakulam awarded 14 years› RI to the first accused in the Kanakamala IS case – for hatching a conspiracy, including through social media platforms and later meeting at Kanakamala in Kannur on October 2, 2016, to plan terror attacks in Tamil Nadu and Kerala against Jews, RSS leaders, BJP leaders, judges and police officers.
The Gold Trail
According to World Gold Council statistics, demand for gold in India declined from 760.4 tonnes in 2018 to 690.4 tonnes in 2019, though in value terms it was up three per cent, from Rs 211,860 crore to Rs 217,770 crore respectively. But gold imports, that account for the entire requirement, apart from smuggled gold, as per the Ministry of Commerce and Industry data, gold imports in June 2020, were down 77.42 per cent against a year ago. And things were no better in the preceding months, mainly on account of Covid-19.
However, much of the gold that comes into India finds no place in official records. IMPACT, a Canadian agency that tracks worldwide movement of contraband gold, says in its November 2019 report titled ‘Golden Web: How India became one of the world’s largest gold smuggling hubs’ that India meets 25 per cent of its annual requirement of 1,000 tonnes via the smuggled route and cautions that the leading global gold manufacturing centre must take action to address the weakness in its supply chain. The report acknowledges that refined gold is being smuggled into India primarily from the UAE. ‘’India is at the heart of a web of illicit trade of gold, with threads spanning the gold and almost certainly financing conflict and corruption,’’ highlights the report.
Excerpts from the remand petition filed by NIA’s chief investigating officer on 21 July
‘’It is submitted that Swapna Prabha Suresh (A-2), Sandeep Nair (A-4) and other accused had conspired together and separately at various places in Kerala to damage the monetary stability of India by destabilising the economy by smuggling large quantities of gold from abroad and it is suspected that they had used this proceeds of smuggling for financing terrorism through various means. These deliberate acts of using the diplomatic baggage of UAE as a cover to transact illegal business may have serious repercussions in the diplomatic relations with the government of UAE and it is prejudicial to the monetary and economic security of India as well. Further, the involvement of other people in to this crime as well as the end users and beneficiaries need to be ascertained.
It is further submitted that during the custodial interrogation the role played by other associates came in to light including one Ramees KT who is one of the kingpin in this case. Sandeep Nair (A-4) stated that Ramees KT insisted for smuggling gold in large quantity and maximum numbers during the lock down period as the financial position of the country is weak etc. A-4 also stated that KT Ramees commands and always moved with a group of persons and have contacts abroad. Steps are under progress to join the said KT Ramees in the investigation of this case.’’ (sic)
Timeline of the diplomatic channel gold smuggling saga
June 30: Diplomatic baggage consignment containing 30 kg of gold from Dubai, addressed to the UAE Consulate (Thiruvananthapuram) Charge D’ Affaires Rashed Khamis al Shameli, reaches Trivandrum International Airport. Customs Department refuses clearance based on alert.
July 5: Consignment opened, after getting necessary MHA, UAE Consulate clearance, 30.25 kg of gold found hidden along with plumbing materials.
July 6: Sarith PS, former PRO of UAE Consulate who had turned up to get consignment released, taken to Customs Office, Kochi for questioning, arrested. Co-accused Swapna Suresh, Sandeep Nair found absconding.
July 10: NIA files case to investigate terror finance behind gold smuggling case.
July 11: NIA takes into custody Swapna, Sandeep from Bengaluru.
July 13: NIA probe team gets Swapna, Sandeep in custody for 8 days till July 21. Customs team arrests known offender Ramees K T, said to be the brain behind the smuggling racket and one who was pushing large volumes of gold during the Covid-19 lockdown period.
July 14-18: Customs pick up a number of suspects, many of them known gold smugglers.
July 19: News break of Faisal Fareed arrest in Dubai police on Friday. Allegations made about his involvement with known names in Malayalam film industry.
July 20: The name of yet another link surfaces – Rabbins from Muvattupuzha, said to be the man sent to Dubai by the hawala dealers in Kerala to supervise Fareed,
July 21: NIA gets custody of Swapna, Sandeep extended till July 24. Stage set for DRI to enter fray as records emerge of illegal holdings in land, deposits in bank lockers.
July 23: NIA questions senior bureaucrat M Sivasankar about his relationship with the main accused in the case, Swapna, Sarith and Sandeep, seeks CCTV footage of his office adjoining the CM›s office in the Secretariat.
July 27/28: Sivasankar questioned by NIA in Kochi; no clean chit even after 25 hours of grilling over three days.