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Pakistan: Sharif Family’s Ways of Money Laundering

By Tauseaf Mumtaz Khan :-

The scale of tax avoidance and money laundering revealed in the Panama Paper leaks. The Panama Papers released by the International Consortium of Investigative Journalists this Sunday unleashed a hailstorm of criticism in Pakistan, after it revealed a network of secret offshore accounts held by the rich and powerful.

Pakistan’s Prime Minister Nawaz Sharif has been heavily implicated in the Panama Papers after Leaked documents show that three of Sharif’s children were linked to offshore companies that owned properties in London.

As Pakistan opposition leaders raised the question that Nawaz Sharif should explain how his children made all this money Mr. Sharif’s son Hussain said all their business affairs were legal.

The Sharif family’s investment in up market London property was disclosed in 1998 by Media reports and a documentary made for a BBC 2 “Correspondent – From Pakistan to Park Lane (via Ilford) (1999).

Owning UK property through offshore companies is perfectly legal. But the Mayfair homes had been bought using “ill-gotten wealth earned through corrupt practices”. The Journalist have got documentary proves as Sharif family these had not been declared on tax returns, in breach of Pakistani law.

The sons and daughter of Prime Minister Nawaz Sharif reportedly set up at least four offshore companies in British Virgin Islands (BVI), said a report released by International Consortium of Investigative Journalists (ICIJ) on Sunday. These companies owned at least six up market properties overlooking London’s Hyde Park. (According to documents seen by the writer)

In October 2008, Nawaz Sharif’s son Hussain and daughter, Mariam, turned to the Swiss arm of Deutsche Bank to borrow large sums, using the flats as collateral. Three BVI companies were used to raise the loan, which entitled Nawaz Sharif’s adult children to borrow £3.5m in cash and a further £3.5m in money to be invested in “liquid assets” by Deutsche Bank. Deutsche began auditing its private banking clients in 2013, seeking confirmation that they complied with all relevant tax rules. The flats in question are at Avenfield House overlooking Park Lane, They are held by two BVI entities on the books of Mossack Fonseca, Nielsen Enterprises and Nescoll Limited. The Park Lane flats were bought between 1993 and 1996, but the companies behind them were not transferred to Mossack Fonseca until 2006. Leaked data shows it took the firm until 2012 to realise that it was acting as agent for the companies.

It’s a matter of fact that Nawaz Sharif passed economic reforms in 1992 which indemnifies all foreign accounts holder from any investigation or taxation. This law created by Nawaz Sharif was misused to launder his own money.

Also in a bid to avoid accountability, the Nawaz Sharif Government amended “The Ehtasaab Act” and made it effective from “1990” instead of “1985” as proposed in the original text of the “Ehtasaab Act” prepared by the interim government of caretaker Prime Minister (Late) Mairaj Khalid (1996-97). And by bringing this change he cunningly saved his tenure of Chief Minister Punjab (1985-88) from accountability.

Nawaz Sharif and Shahbaz Sharif are accused of whitening black money during their first tenure (1990-93) and causing a loss of Rs 180 million to the national exchequer by evading income/wealth tax.

How they did it ?
We have established that bank accounts containing pounds 5m were set up in the names of three members of the family from Ilford, Essex. These deposits were used to raise millions of pounds in loans which, according to documents detailing Pakistan police inquiries, were channeled into Sharif family-owned businesses. The money was laundered through “fictitious bank accounts” and, using family business interests, was siphoned into offshore accounts.

Bank accounts were set up in the names of three members of the Qazi family who were close friends of Current Finance Minster of Pakistan Ishaq Dar. Ishaq Dars elder son Ali Dar is married to Nawaz Sharif”s daughter. Ishaq Dar also served as the Commerce and Finance Minister in the Nawaz Sharif cabinet of 1997-1999. Ishaq Dar was assigned the finance ministry when Sartaj Aziz was posted as the Foreign Minister of Pakistan in 1998. Dar continued on the post till the Sharif government’s overthrow by the military coup of General Pervez Musharraf.

The Qazi family claimed that these accounts were set up – without their knowledge – with the assistance of this senior politician who had lived with them at their home while he was studiedی accountancy in Britain. But the local community in Ilford informed that during most Jumah prayers Mr. Masud Qazi, who lived in Ilford, Essex used to donate large sums of money and used to announce that it was from Prime Minister Mian Nawaz Sharif.

According to Qazi Family, the accounts were opened using copies of their passports, which they had given him to obtain Pakistani ID cards on their behalf. They said almost pounds 5 Million were then deposited. In 1992 they received the first of a series of statements from the US banks in Lahore, indicating that three family members – Kashif, his mother Sikandra and her daughter-in-law Nuzhat Gohar – had balances totalling pounds 5m.

According to Kashif Masood Qazi as said in an interview that ,“A rough estimate, from seeing the documents that came to our house, is that about 440 Millions moved through the accounts in our names.

Ishaq Dar confessed in his statement: “I opened two foreign currency accounts in the name of Sikandra Masood Qazi and Talat Masood Qazi with foreign currency funds provided by the Sharif family in the Bank of America by signing as Sikandara Masood Qazi and Talat Masood Qazi. All instructions to the bank in the name of these two persons were signed by me under the orders of original depositors, namely Mian Nawaz Sharif and Mian Shahbaz Sharif. The foreign currency accounts of Nuzhat Gohar and Kashif Masood Qazi were opened in Bank of America by Naeem Mehmood under my instructions (based on the directives of the Sharifs) by signing the same as Nuzhat Gohar and Kashif Masood Qazi.”

On December 3, 2012, Justice Khwaja Imtiaz Ahmed and Justice Farrukh Irfan Khan of the Lahore High Court’s Rawalpindi bench reserved its judgment on the Rs3.48 billion ‘willful loan default case’ against the Sharifs concerning the Hudabiya Paper Mills after the NAB prosecutor Chaudhry Riaz Ahmed completed his arguments in the case. While concluding his arguments in the Hudabiya Mills case before a division bench of the LHC on December 3, 2012, the NAB prosecutor Chaudhry Riaz Ahmed narrated in detail the 43-page handwritten statement by Senator Ishaq Dar wherein he had accused the Sharifs of involvement in money laundering. As per the statement, which had been recorded before a District Magistrate, Lahore, on April 25, 2000, Dar accused the Sharif brothers of having used the Hudabiya Paper Mills as cover for money laundering during the late 1990s. Dar’s statement was recorded before a district magistrate in Lahore, after he was brought to the court from a jail by Basharat Shahzad, then serving as assistant director in the Federal Investigation Agency (FIA).

As per Dar’s statement recorded before District Magistrate Lahore on April 25, 2000, besides these foreign currency accounts, a previously opened foreign currency account of Saeed Ahmed, a former director of the First Hajvari Modaraba Company and a close aide of Dar, and of Mussa Ghani, the nephew of Dar’s wife, were also used to deposit huge foreign currency funds provided by the Sharif family to offer them as collateral to obtain different direct and indirect credit lines. Dar conceded that the Bank of America, Citibank, Atlas Investment Bank, Al Barka Bank and Al Towfeek Investment Bank were used under the directives of the Sharif family.

Senior officers from the Special Branch of London Metropolitan Police called on Our source in his offices in London, to discuss some issues related to Qazi family. They shared some secret information and showed a passport copy of Masud Qazi and his wife and enquired. According to them these passport copies were found with a senior police officer from Metropolitan police who got arrested due to some drugs related case, and upon search in his briefcase police found Qazi family passports with some drugs too. On investigation, we found the said Met Officer was in contact with some drug dealers also money launderer known as Shahista Khan and Khamista Khan who were also in link with Ishaque Dar as they were the source for transferring huge funds.

In December 1998, the family of Nawaz Sharif was sued in London Court over debts of more than 11 Millions. A write was issued in the High Court named Prime Minister’s father Mian Sharif and two brothers as guarantors of a huge loan which was used to purchase manufacturing for their paper mill business in Lahore. The action was being taken by the Al- Towfeeek Company for investment Funds Investment ۔

The London High Court on February 5, 1999 ruled: “It is hereby ordered that: 1) the defendants’ application under RSC Order 12 Rule 8 be refused. 2) Costs of this application be paid by the defendants to the plaintiff to be taxed if not agreed.”

On March 16, 1999, the court delivered its judgment ordering Hudabiya and the three other defendants to repay the loan. The amount due was not paid and on November 5, 1999, the court by a one-page order ordered that the properties of the Sharifs be attached. The judgment said that upon reading the witness statements of Shezi Nackvi filed on the 26th October, 1999, and 5th November 1999 whereby it appeared that by a judgment made on the 16th March 1999 in the High Court of Justice, Queen’s Bench Division, the defendants were ordered to pay to the plaintiff the loan money but till date it remained due and that the defendants have a beneficial interest in the assets specified in the schedule thereto.

“It is ordered by Master Trench that unless sufficient cause to the contrary be shown before a judge in chambers in Room No. E101, Royal Courts of Justice, Strand, London, the second and third and the fourth defendant’s interests in the said assets, to the extent of their respective interests, shall and it is ordered in the meantime it do, stand charged with the payment of loan due on the said judgment. And it is further ordered that this application and all documents supporting it be served on the companies named in para 16 of the first witness statement of Shezi Nackvi, as to which leave is granted to serve them in the British Virgin Islands, and also the creditors named in paragraph 4 of the said Mr Nackvi’s second witness statement, as to which leave is granted to serve the same in Pakistan or in the state or states where any of them are registered.”

The schedule lists the four properties owned in London by the Sharifs: 16, 16A, 17 and 17A Avenfield House, at 117-128 Park Lane, London.

Hussain Nawaz, son of the prime minister, has told the media in his repeated statements that only after selling a steel mill in Saudia Arabia in 2006, he bought two offshore companies Nielsen Enterprises Limited and Nescoll Limited and then purchased flats number 16, 17, 17A of Park Lane London in the names of these offshore companies. He said that he or any member of his family never owned these offshore companies before 2006.

According to the UK government official documents, following are the details of these flats and their ownership since 1993.

Flat 16, Avenfield House, Park Lane, London, Registered Owner: NIELSEN ENTERPRISES LIMITED care of Messrs Dibb Lupton Broomhead (reference LJR), 125 London Wall, London EC2Y 5AE. Title Number: NGL338285. Flat was registered in the name of Nielsen on July 31, 1995. The official documents say that flat only comprises the portion on 3rd floor of the building and property was made in 1978.

Flat 16A, Avenfield House, Park Lane, London, Registered Owner: NIELSEN ENTERPRISES LIMITED care of Messrs Dibb Lupton Broomhead (reference LJR), 125 London Wall, London EC2Y 5AE. Title Number: NGL351184. Flat was registered in the name of Nielsen on July 31, 1995. The official documents say that flat only comprises the portion on 3rd floor of the building and property was made in 1979.

Flat 17, Avenfield House, Park Lane, London, Registered Owner: NESCOLL LIMITED care of Dibb Lupton Broomhead, of 125 London Wall, London EC2Y 5AE. Title Number: NGL342976. Flat was registered in the name of Nielsen on June 1, 1993. The official documents say that flat only comprises the portion on 3rd floor of the building and property was made in 1978.

Flat 17, Avenfield House, Park Lane, London, Registered Owner: NESCOLL LIMITED care of Dibb Lupton Broomhead, of 125 London Wall, London EC2Y 5AE. Title Number: NGL342977. Flat was registered in the name of Nielsen on July 23, 1996. The official documents say property was made in 1978.

The offshore companies Nielsen and Nescoll owned these Park Lane London flats since 1993. How did the Sharif family pledge the flats with a UK bank in 1995 to obtain a financial facility without owning the offshore companies?

Please click link below for the documents


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