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 organizations 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 utilized for terrorist purposes since no audit or paper trail is available. -PTI
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