The sources of funds are under suspicion as the donors were mostly anonymous, India Today reported.
According to the report, Naik, who is president of the Islamic Research Foundation (IRF) which has been banned in India, allegedly received funds in the form of zakat (donations) from various sources in India and abroad, including Malaysia.
India Today quoted sources as saying the donors remained unidentified as their names in the receipts were mentioned as “well wishers” and that the IRF had various accounts in which the donations were deposited or transferred.
The report said investigations by the ED, India’s financial crime investigation agency, revealed that donations from unknown sources were apparently in response to the “hate speeches” made by Naik.
However, this was disputed by Naik’s lawyer Mobeen Solkar, who was quoted as saying: “The speeches were not inflammatory or provocative. Even if it is assumed they were, the offence falls under Section 153 A of the Indian Penal Code, which is not a scheduled offence.
“The provisions of the PMLA (Prevention of Money Laundering Act) can only be invoked in cases of scheduled offences. The proceedings are unwarranted and unjustified.”
According to the India Today report, the ED investigation found that the IRF had made a huge amount of money and that Naik had used some dummy companies to camouflage the diversion of funds received by him through his “illegal activities of provocative speeches”.
India Today quoted Mobeen as saying: “All allegations are baseless. We have cooperated in the investigation. The ED has already arrested one person. None of the companies are dummy companies. Some of them were already doing business and others were about to start theirs.”
Naik, who has Malaysian permanent resident status, fled India after his name surfaced in an investigation into the terrorist attack at the Holey Artisan Bakery restaurant in Dhaka, Bangladesh, where 22 people were killed.
A police investigation revealed that the perpetrators had been influenced by Naik’s speeches.
The ED recently applied to a special court in Mumbai for permission to lawfully seize some properties of Naik in Malaysia.