TIMES OF INDIA
NEW DELHI: Manipulation of stock exchanges is the new modus operandi used by terrorist groups to raise funds for their operations and fictitious companies have operated in the Mumbai and Chennai stock exchanges.
Revealing this, National Security Advisor M K Narayanan has said some of these companies were later traced to terrorist groups.
“Isolated instances of terrorist outfits manipulating the stock markets to raise funds for their operations have been reported. Stock exchanges in Mumbai and Chennai have, on occasions, reported that fictitious or notional companies were engaging in stock market operations,” he said while addressing the 43rd Conference on Security Policy in Munich last week.
Calling for the lifting of banking secrecy and the corporate veil in terrorist-related cases, he said security agencies had detected many instances of funds received via banking channels from so-called safe locations like Dubai and UAE that were intended for terrorist groups.
Squarely blaming certain “official agencies” in Pakistan for pumping millions of dollars for militancy in India, he said jehadi groups had started to establish a network of legitimate businesses to fund their activities.
The terrorist groups are involved in legitimate business enterprises like restaurants, real estate agencies and shipping and use part of their proceeds to siphon off funds for their terrorist activities, he said.
“Among terrorist outfits, the LTTE has a very well- established network of legitimate business, which provides both funds as well as logistics for their activities. Jehadi terrorist organisations have begun to follow suit,” Narayanan said.
He said a combination of conventional money laundering techniques, with placement of funds by using the “underground and parallel banking system” (hawala) has made it extremely difficult to track funds utilised for terrorist purposes since no audit or paper trail is available.
Referring to 11 common ways of terrorist funding, the NSA said among them were voluntary contributions on which terrorist groups like Al Qaeda and LTTE thrive, forced and compulsory donations including forcible subscription of their publications, extortion and use of coercive methods.
“The Lashker-e-Taiba, the Hizbul Mujahideen and the Al- Badr (militant outfits which operate in India) are well patronised, including through provisions of funds, by certain official agencies across the border,” he said.
Shared objectives such as involvement in “low intensity conflict” provide the excuse for such official support. “A tentative estimate of funds made available to such terrorist outfits annually is in the region of a few million dollars,” he said.
The unholy nexus between jehadi groups and non-jehadi terrorist groups seek, and enter into, partnerships with organised criminal syndicates for fund-raising by indulging in kidnapping for ransom and bank robberies, Narayanan said.
Counterfeiting of currency is currently a favourite method adopted (by agencies across the border) to fund terrorist activities directed against India, he said.
The NSA said large amounts of “high quality” counterfeit Indian currency were detected each year and the “normal route” for bringing the forged notes into India was through Nepal and Bangladesh.
Elaborating on the misuse of legitimate banking channels, Narayanan said terrorist groups generally make small transactions so as not to attract attention and to avoid detection. “Use of both real, and fraudulent, ATM cards has also been resorted to at times,” he said.
Charities and proceeds from narcotics were among other funding channels for terrorist groups, Narayanan said.
“India believes that there is a need for greater vigilance and stricter provisions so as to make off-shore jurisdiction more transparent. In addition, lifting banking secrecy and the corporate veil in terrorist-related cases would help,” he said.
Seeking further international cooperation to tackle the menace of terrorism, he said, “...pooling of strengths by all concerned states is critical to defeat terrorism worldwide.”
The conference was attended, among others, by Russian President Vladmir Putin, Iran’s National Security Advisor Ali Larijani and German Chancellor Angela Merkel.