New Delhi | The Enforcement Directorate has arrested SDPI national president M K Faizy in a money laundering case linked to the banned terrorist organisation PFI as the central agency claimed there existed an "organic" relation between the two outfits and that PFI was carrying out its criminal activities through the political party.
The Social Democratic Party of India (SDPI), founded in 2009 and headquartered in Delhi, is alleged to be the political front of the Popular Front of India (PFI), which was banned by the Union government in September 2022.
The SDPI is registered with the Election Commission as a political party.
Moideen Kutty Faizy, 55, was taken into custody at 9:30 pm on Monday from the Indira Gandhi International (IGI) Airport after he landed here from Kochi, Kerala, official sources said Tuesday.
The ED recorded his statement and also impounded a mobile phone from him at the airport, the sources said.
A special Prevention of Money Laundering Act (PMLA) court sent him to ED custody for six days after he was produced by the agency on Tuesday.
Officials told PTI that the ED has found evidence that PFI funds to the tune of Rs 4.07 crore were utilised by SDPI.
The federal probe agency, according to the officials, would soon inform the Election Commission about these "illicit funds" of the PFI being routed to the SDPI which was a "recipient, beneficiary and user of the proceeds of crime".
The ED told the court, while seeking his remand, that PFI and SDPI were "organically" linked and SDPI was nothing but the "political front" of PFI and was "funded and controlled" by the former.
It claimed that it had evidence to state that there was a "deep-rooted" nexus between the two organisations as there was "overlapping" membership of their cadres, involvement of PFI office bearers in the founding of SDPI and utilisation of each other's assets.
"SDPI is a front organisation of PFI and through which PFI has been carrying out its anti-national and criminal activities even while overtly taking a stand that PFI is a social welfare organisation," the ED alleged.
The SDPI, however, denies such a link and calls itself an independent outfit.
The agency informed the court that Faizy's custody was required to find out "many aspects of cross-border fundraising and transmission through secret channels, layering and their utilisation in criminal activities by PFI, SDPI and their related organisations and entities."
It said Faizy was "actively and knowingly" involved in the acquisition, possession, concealment and utilisation of the proceeds of crime and their "ultimate use" for various purposes including "election expenditure", which were generated both within India and abroad.
"These proceeds of crime were subsequently layered and projected as untainted money by utilising the same in various capacities of SDPI including election funding."
It said Faizy also had a "vicarious" responsibility (under section 70 of the PMLA) as the national president of the SDPI.
The ED also alleged that PFI was "directing" SDPI on the process of selecting candidates for assembly and parliamentary elections.
The agency said it has recovered and seized documents that show that PFI "has been paying for legal fees of SDPI members accused in criminal cases filed by the police".
It said the "criminality" of SDPI being funded by PFI is also borne out of the fact that the funding was made in "cash" and, thus, not reflected in their bank statements and this underscores the "illegal" and "surreptitious" nature of such transfers.
This was done with the intent to "obliterate" the money trail so that SDPI can officially deny the receipt of funds from PFI, as per the ED.
Faizy, as per the ED, was questioned for three days in January last year but he later skipped as many as 12 summons between March 2024 and February 7, 2025 and hence a non-bailable warrant was secured against him by the agency from a local court.
Faizy, during his questioning by the ED in January last year, asserted that SDPI "had no relation" with PFI and it was "not funded" by the banned outfit.
According to the SDPI, Faizy is among the founder leaders of the organisation and was elected its national president in 2018.
He is an Islamic scholar and a political observer who served as a Masjid Imam in the 1980s, it said on its portal.
The organisation, according to officials in the investigative agencies, has "strong" influence in various pockets of Kerala and Karnataka and some other south Indian states.
The ED, as part of its probe against the PFI in 2022, had linked Faizy with a Kerala-based PFI leader named Abdul Razak BP who is alleged to have "transferred" Rs 2 lakh to the SDPI national president as part of the fundraising activities of his (Razak's) organisation.
Thiruvananthapuram | The BJP on Tuesday used the arrest of SDPI national president M K Faizy by the Enforcement Directorate to attack the Congress-led UDF and the CPI(M)-led LDF, urging them to explain their relationship with the outfit.
The Social Democratic Party of India (SDPI), founded in 2009 and headquartered in Delhi, is alleged to be the political front of the now-banned Popular Front of India (PFI).
Faizy, according to sources, was detained on the night of 3 March from Delhi International Airport under the Prevention of Money Laundering Act (PMLA).
In a post on 'X', senior BJP leader Prakash Javadekar claimed that "revelations of the investigation before the court is that SDPI is nothing but PFI."
"Modi government banned PFI, and has exposed SDPI, whose president is arrested. LDF and UDF have to explain their relationship with SDPI. Both fronts were always sympathetic with terror outfits," Javadekar said.
The BJP leader levelled allegations against the major political fronts of Kerala hours after a Delhi court on Tuesday sent Faizy to the custody of the ED for six days in connection with an alleged money laundering case linked to the proscribed PFI.
Both the LDF and the UDF have not responded to the allegations made by Javadekar, who is the BJP's in-charge for Kerala.