A close associate of hardline Hurriyat Conference chairman Syed Ali Shah Geelani was arrested in connection with an alleged Hawala racket and Rs 21 lakh seized from him, police said on Sunday.

“Ghulam Mohammad Bhat, who has been a financier of disruptive activities, has been arrested,” Inspector General of Police, Kashmir, S M Sahai told PTI.

He said Rs 21 lakh were recovered from Bhat’s possession at the time of his arrest from his Hyderpora residence on Saturday. Bhat was injured in a scuffle between police and his family who tried to resist his arrest and is presently admitted at SKIMS Hospital in Soura.

Official sources said a team from Delhi Police has arrived here to take custody of Bhat, who claims to be an advocate and was arrested in a similar case three years ago.

Bhat was arrested in 2008 in Udhampur district while returning to the Valley with Rs 55 lakh in alleged Hawala money concealed in a gas cylinder.

A team of doctors is assessing Bhat’s condition and are expected to give their opinion about the feasibility of shifting him to Delhi, the sources said.

Two other persons - one hailing from Kupwara and another from Sopore in north Kashmir - have also been arrested in connection with the case, the sources said adding, more arrests are expected over the next couple of days.