CHENNAI: The Enforcement Directorate (ED) has provisionally attached assets worth Rs 55.30 crore under the Prevention of Money Laundering Act (PMLA), 2002. The attached assets belong to Jaffer Sadiq Abdul Rehman, a former functionary of the DMK’s NRI wing and an international drug trafficker. The attached properties include high-end vehicles and luxury real estate, adding further gravity to the high-profile case.
ED, Chennai has provisionally attached assets (14 immovable properties, such as the JSM Residency Hotel and a luxurious bungalow, and 7 high-end vehicles like Jaguar and Mercedes) worth Rs 55.30 Crore belonging to Jaffer Sadiq and associates on 2/09/2024 under the PMLA, 2002.
— ED (@dir_ed) September 5, 2024
The attached assets, as per an official release from the ED, include 14 properties such as the JSM Residency Hotel and a luxury bungalow, along with seven high-end vehicles, including Jaguars and Mercedes. These assets were reportedly acquired using proceeds from Sadiq’s illicit drug trafficking operations. The ED’s investigation revealed that Sadiq and his associates laundered money earned from drug trafficking and invested it in various legitimate ventures.
ED, Chennai has provisionally attached assets (14 immovable properties, such as the JSM Residency Hotel and a luxurious bungalow, and 7 high-end vehicles like Jaguar and Mercedes) worth Rs 55.30 Crore belonging to Jaffer Sadiq and associates on 2/09/2024 under the PMLA, 2002. pic.twitter.com/jv0p9llWUy
— Mahalingam Ponnusamy (@mahajournalist) September 5, 2024
Involvement in Drug Trafficking and Money Laundering
Jaffer Sadiq, in collaboration with his brother Mohammed Saleem and others, is accused of playing a crucial role in the export and concealment of narcotic substances, including pseudoephedrine. Pseudoephedrine is a precursor chemical used in the production of methamphetamine, a controlled substance. The ED noted that Sadiq had been a director or proprietor of several firms, which were used to route proceeds from his drug operations into real estate, film production, hospitality, and logistics businesses.
Sadiq’s network used a sophisticated system to launder the proceeds of crime. The illicit cash was deposited into multiple bank accounts through a network of financers, layered through intermediaries, and recorded as unsecured loans in financial statements. The funds were then used to acquire assets in the names of Sadiq, his wife Ammena Banu, and associates, including individuals like Mydeen Gani, Mohammed Mustafa S, and Jamal Mohammed, some of whom are believed to be benami holders.
ED’s Crackdown and Arrests
The ED arrested Jaffer Sadiq on June 26, 2024, followed by the arrest of his brother Mohammed Saleem on August 12, 2024. Saleem is alleged to have been a key figure in the export and concealment of narcotics, working closely with Sadiq to launder the illicit proceeds. Saleem, like Sadiq, used his position as a director or partner in multiple firms to conceal and layer the proceeds of crime.
The ED’s investigation also revealed that Sadiq and Saleem had laundered drug money through investments in various sectors, using an intricate network of bank accounts and shell companies. These companies were controlled either directly by Sadiq or through his family members and associates, enabling the pair to create a smokescreen for their illicit activities.
Background: Drug Trafficking Network and International Connections
The investigation into Sadiq’s activities began after his arrest by the Narcotics Control Bureau (NCB) in March 2024. The NCB apprehended Sadiq for his alleged role in a Rs 2,000 crore international drug trafficking racket that involved the smuggling of pseudoephedrine and ketamine. The smuggling operation had international connections, with drugs being shipped from India to Australia, New Zealand, and Malaysia, camouflaged as food products like health mixes and desiccated coconut.
The cartel, led by Sadiq, was busted by the NCB and Delhi Police following a four-month-long joint operation. The operation was initiated after a tip-off from police authorities in New Zealand and Australia, who had intercepted shipments of pseudoephedrine originating from India. On February 15, 2024, three men were caught red-handed in a warehouse in West Delhi’s Basai Darapur area, leading to the unraveling of the drug cartel.
The NCB stated that the cartel used both air and sea cargo to smuggle the drugs, concealing them in everyday items. Sadiq, the cartel’s leader, was later transferred to Chennai from Tihar Jail after a formal arrest warrant was issued by the ED. On July 15, 2024, the Principal Sessions and Special Court handling PMLA cases placed Sadiq in judicial custody for 15 days as the ED sought his remand. The court subsequently granted the ED three days of custody for further interrogation, from July 17 to July 19, 2024.
JSM.RESIDENCY. Hotel. திரு.மாண்புமிகு அமைச்சர். P.K. சேகர் பாபு. MLA. இந்து சமய அறநிலையத்துறை அமைச்சர். அவர்கள் திறந்து வைத்தார். சிறப்பு விருந்தினராக இயக்குனர் நடிகர். திரு. அமீர் அவர்கள் கலந்து கொண்டு விழா சிறப்பித்தார். இதன் pic.twitter.com/EsZQFkAf6a
— Chennai journalist (@ibrahim_Ajay) August 2, 2022
Key Figures and Entities Involved
Apart from Sadiq and Saleem, several others are believed to have been involved in the laundering and drug trafficking operation. Mohammed Mustafa S and Jamal Mohammed are suspected benamis who helped conceal the true ownership of some of the laundered assets. The laundered funds were used to acquire both movable and immovable properties, many of which are now under the ED’s provisional attachment.
JSM Residency Hotel, one of the prime properties attached by the ED, was inaugurated in August 2022 by Tamil Nadu’s Hindu Religious and Charitable Endowments (HR&CE) Minister PK Sekarbabu and Dravidianist-Islamist film director Ameer. This high-profile event has added to the controversy surrounding Sadiq’s activities, as the property is now tied to proceeds from drug trafficking.
Court Rulings and Further Investigations
The ED has been working closely with the NCB to uncover the full extent of Sadiq’s operations. On August 11, 2024, the ED arrested Mohammed Saleem under the PMLA for his role in laundering proceeds from drug trafficking. Saleem had been under investigation since March, and his arrest marks a significant development in the ongoing probe.
According to the ED, Saleem played a pivotal role in the export and concealment of pseudoephedrine and other narcotic substances. He, like Sadiq, held directorial positions in several firms that were used to launder money. The ED continues to investigate the extent of the cartel’s operations, and more arrests and attachments are expected.
