Al-Falah University Founder in ED Custody for 13 Days Over Alleged Fund Diversion & Shell Companies

In a major development, the Enforcement Directorate (ED) has taken Jawad Ahmed Siddiqui, founder and chairman of the Al-Falah Group, into 13-day custody, following allegations of large-scale financial irregularities involving his charitable trust and associated family firms.

The Allegations: Fund Diversion & Family Firms

According to ED sources and court documents, investigators believe that crores of rupees have been siphoned from the Al-Falah Charitable Trust, which backs Al-Falah University and other entities, into businesses controlled by Siddiqui’s family.

Specifically, contracts for construction work and catering services are said to have been awarded to companies owned by Siddiqui’s wife and children — allegedly without proper competitive bidding or transparent procurement.

ED Raids & Seizures

The ED carried out coordinated raids across 19 sites tied to the Al-Falah group, including the university campus in Faridabad, as well as the personal residences of Siddiqui and other key figures.

During these searches, authorities confiscated ₹48 lakh in cash, multiple digital devices, and “voluminous documentary evidence” that could be critical to the investigation.

Shell Companies & Money Laundering Structure

ED’s preliminary findings suggest a complex network of shell companies, potentially used to launder and layer proceeds of crime.

Officials claim at least nine shell firms linked to the Al-Falah group have been identified. Many of these companies appear to operate out of the same address, raising red flags on their authenticity.

Investigators also point to suspicious corporate governance patterns: common contact numbers and email IDs across companies, negligible staff costs, and weak KYC compliance.

Context of the Probe

The ED’s action follows the registration of multiple FIRs by the Delhi Police Crime Branch, which allege that Al-Falah University misled students and stakeholders through false accreditation claims.

The university is accused of wrongfully claiming NAAC accreditation.

It is also alleged to have falsely represented its UGC status, claiming recognition under Section 12(B) even though it only holds status under Section 2(f), which doesn’t make it eligible for central grants.

Terror Link & Broader Investigation

Investigators are exploring whether the misused funds may have links to a “white-collar terror module”, triggered by broader concerns around Al-Falah group’s financial structure.

The timing of Siddiqui’s arrest coincides with growing scrutiny over national security — including investigations related to a Red Fort blast case.

Legal Proceedings

Siddiqui was formally arrested under Section 19 of the Prevention of Money Laundering Act (PMLA), the agency confirmed. He has since been produced before a special court, which granted 13-day ED remand for further questioning.

Implications & Concerns

1.      Educational Credibility at Stake
The allegations cast a shadow over Al-Falah University’s reputation, especially regarding its accreditation claims.

2.      Trust Abuse
If confirmed, the misuse of a charitable trust for personal or family gain could erode public trust in philanthropic education trusts.

3.      Regulatory Gaps
The shell company network highlighted by the ED underlines potential loopholes in oversight, especially for institutions tied to charitable trusts.

4.      National Security Dimensions
The probe’s link to terror financing (as suggested by authorities) raises difficult questions about how educational institutions can be misused in larger illicit financial networks.