KARACHI: Directorate of Post Clearance Audit (South), Karachi has identified significant irregularities and violations in the operations of various importers.

As a result of shocking revelations, two FIRs have been lodged against M/s Bright Star Business Solution (Pvt.) Ltd and M/s Moonlight Trader (SMC) Pvt Ltd. on 02.9.2023 on commission of fiscal fraud including over-invoicing, obstruction to audit and use of illicit funds to finance imports involving trade-based money laundering (TBML).

The investigation into the operations of M/s Bright Star Business Solution (Pvt.) Limited and M/s Moonlight Trader (SMC) Pvt Ltd has uncovered a web of deceit and illicit activities.

Upon physical verification, the company’s registered premises were found to be closed, raising suspicions about its legitimacy. Bank statements further exposed mutual fund transfers between M/s Bright Star and M/s Moonlight Traders (SMC) Pvt. Ltd suggesting a strong association between the two suspected companies. Both entities were discovered to be located in the same building, Deans Trade Centre, Peshawar Cantt.

Alarming evidence emerged, indicating that these associated importers transferred a total of Rs. 73 billion out of Pakistan in connection with solar panel imports. The combined over-invoicing quantum in 2,718 import GDs stood at an astonishing Rs. 38 billion as declared import values were abnormally high and ranged between USD 0.35 to 0.70 per watt.

The Pakistan Solar Association, in a communication to customs, also confirmed that bonafide prices of solar panels should range between USD 0.17 to 0.22 per watt.

Income tax records strongly indicated that said companies operated as fictitious entities utilising illicit funds exceeding their legitimate financial worth.

Sales tax declarations confirmed that the solar panels, which were originally imported at a value of Rs. 73 billion, were subsequently sold in the local market at much lower value at Rs 46 billion.

This stark contrast between the import and local sale values proved that the import values were significantly over-invoiced at import stage.

In view of gravity of the violations committed by M/s Bright Star Business Solution (Pvt.) Limited and M/s Moonlight Traders (SMC) Pvt Ltd. said suspected companies face charges of fiscal fraud, prompting criminal prosecution under the Customs Act, which further necessitates parallel proceedings in accordance with the AML Act 2010 for trade-based money laundering.

Sources have reported that acting upon the directions of FBR, DG PCA Chaudary Zulfiqar Ali assigned the PCA South to speed up investigation of the case. Director PCA South, Sheeraz Ahmed and his team including Additional Director Gulam Nabi Kambo, Deputy Director Saima Zaib Butt and Auditing Officers Abdul Ghaffar, Hubban Chaudary and Fahad Iqbal unearthed serious violations in the solar panels sector leading to the lodging of FIRs which marks a significant development in the case.

The authorities are actively pursuing further investigation into the matter to bring the culprits to justice and hold them accountable for their actions.

The exposure of such an elaborate illicit scheme involving massive fund transfers and fiscal fraud highlights the importance of stringent monitoring and enforcement measures in the business and import sectors. The investigation into M/s Bright Star Business Solution (Pvt.) Limited and /s Moonlight Trader (SMC) Pvt Ltd. raises concerns about the prevalence of such illicit activities and calls for stricter regulations to prevent such incidents and safeguard the integrity of Pakistan’s financial system.

An official said that not only these importers are involved in money laundering, they are also bringing defective and scrap solar panels and equipment, which is the reason that solar penetration is slow in the country.