"Exhaustive evidence, including cash recovered from trustees, diversion of funds to family concerns, layering of funds, etc., clearly establishes the pattern of generation and layering of proceeds of crime. After establishing his culpability, he was arrested following due legal procedure," an official said.

The Al-Falah Charitable Trust, the official added, was constituted through a public charitable trust deed dated September 8, 1995, with Jawad Ahmad Siddiqui named as one of the first trustees and designated as the managing trustee.

“All the educational institutions (university and colleges) are ultimately owned and financially consolidated under this trust, which is effectively controlled by Jawad Ahmad Siddiqui. The entire Al-Falah Group has seen a meteoric rise since the 1990s, metamorphosing into a large educational body. However, the rise is not backed by adequate financials,” he said.

Last week, the government asked the ED to review the financial trail of the institution following a high-level meeting chaired by Union Home Minister Amit Shah.

"In a coordinated enforcement operation at 5:15 a.m. today, officials executed search actions at 25 premises of the Al-Falah Group in connection with the ongoing investigation into financial irregularities, use of shell companies, accommodation entities and money laundering," an ED official said.

"The role of the Al-Falah Trust and related entities is under investigation. Key personnel overseeing finance and administration have also been covered," he said.

According to officials, nine shell companies linked to the Al-Falah Group, all registered at a single address, are under examination.

"Early findings point to multiple risk indicators consistent with shell-company behaviour, including no physical presence or meaningful utility consumption at declared places of business, common mobile numbers and email addresses across various companies and accounts," the official said.

Other indicators include the absence of EPFO/ESIC filings inconsistent with the reported scale of operations, overlapping directors/signatories and weak KYC trails across entities, minimal salary disbursal through banking channels, absence of HR records, synchronised incorporation patterns and common contact coordinates across firms, he added.

Delhi Police has also registered two FIRs on a complaint from the University Grants Commission (UGC). One FIR alleges cheating, while the second invokes charges of forgery.

The Association of Indian Universities (AIU) has revoked Al-Falah University’s membership amid accusations of its linkage with the "terror module."

Earlier, the National Assessment and Accreditation Council (NAAC) issued a show-cause notice seeking the university's response on alleged irregularities.

According to the notice, the university had claimed on its now-inaccessible website that its Al-Falah School of Engineering and Technology and Al-Falah School of Education and Training had been awarded “A” grades by the NAAC. However, the engineering school and the education-and-training school were accredited in 2013 and 2011, respectively, for five years each, and the validity of those accreditations expired long ago. The university did not seek fresh accreditation after the expiry, making its continued claim about the "A" grades "misleading," the notice said.