KARACHI: The Financial Monitoring Unit (FMU) of State Bank of Pakistan (SBP) has reported Govind Ram s/o Tharoo Mal, director of Awan Trading Company (Pvt) Ltd, to Federal Board of Revenue (FBR) for further investigations as the individual is suspected to be involved in tax evasion and money laundering.
Awan Trading (Pvt) Ltd is the largest importer of coal in Pakistan. The amount of tax paid by Govind Ram is marginal in comparison with the huge turnover in his bank accounts.
Govind Ram opened a account in his personal name in Standard Chartered Bank and declared himself the owner of Awan Trading dealing in wholesale of raw material such as coal.
While reviewing the account statement, FMU observed an unusual transactional activity and volume in the account which did not match with the suspect’s known profile. The average monthly turnover in the account was Rs.6.4 million against the expected monthly turnover of Rs 0.6 million and the aggregate debit and credit in the account were noted to be Rs.116 million and Rs.116 million respectively from Feb, 2014 to Nov, 2016.
The suspicion was raised when a sudden surge in transactions was observed in the account during the period between May 20I6 to June 2016. The suspect received approximately Rs 65 million via clearing cheques (mostly within Rs.1 million) and cash deposits within this short period of time i.e. only two months, which were subsequently withdrawn as cheque debits and PO issuances.
Govind informed the branch that the deposited funds were the sale proceeds of one of his properties and that the same funds were withdrawn subsequently for the purchase of another property, however, he did not provide any documentary evidence. As the bank was not satisfied with the transactional pattern of the account, so the account was closed on 03-Nov-2016.
A search across FMU’s internal database revealed that 16 currency transaction reports (CTRs) have been reported against the CNIC number of the suspect. Some of these CTRs are against his personal accounts while others are against the accounts of M/s Awan Trading Co, (Pvt) Limited, where the CNIC number of the suspect was provided as the Director of the company in the time of account opening.
According to Financial Monitoring Unit (FMU), the turnovers in the personal as well as business accounts are extremely high. The reason behind extremely high turnovers in personal accounts might be that Govind is using his personal accounts for carrying out business related transactions.
It is pertinent to note that one Suspicious Transaction Report (STR) had already been reported to FMU in 2013 by Askari Bank Limited against Govind Ram.
Govind Ram is registered for NTN in the name of Sapna Traders and Builders. According the report, the nominal amount of tax paid and the fact that he is using his personal accounts for routing business transactions of billions of rupees clearly indicates that Govind Ram is intentionally avoiding the payment of tax.
An official said hundreds of such reports were forwarded to Inland Revenue Intelligence & Investigation involving billions of rupees, however no action was initiated against any of the suspects.
It may be mentioned here that in several cases of money laundering and tax evasion, persons involved in corruption and evasion of billions of rupees were given bail against nominal security deposits. An official said Courts acted as per law, but there is a need to make amendments so that accused in such cases, who are usually rich, should be granted bail only against deposit of security deposits matching the amount involved in the cases. The official said money laundering is one of the reason Pakistani rupee value declined.