KARACHI: In a significant development, a large-scale money laundering scandal has been unearthed in the import of solar panels, revealing over-invoicing amounting to Rs69.5 billion between 2017 and 2022. The discovery was made by Director Post Clearance Audit Sheraz Ahmed and his diligent team, who performed extraordinarily in uncovering this extensive fraud.
The officials of the Federal Board of Revenue (FBR) disclosed this information during a briefing to the sub-committee of the Senate Standing Committee on Finance, which was chaired by Senator Mohsin Aziz. The scandal involves the import of solar panels from China, with payments being made to companies in various other countries, a clear violation of Pakistani laws.
The committee was informed that a total of Rs117 billion was transferred abroad through this fraudulent scheme. Payments were made to companies located in ten different countries, including the UAE, Singapore, Switzerland, the US, Australia, Germany, Canada, South Korea, Sri Lanka, and the UK.
In response to this discovery, the FBR has shortlisted 63 solar panel importing companies for investigation, and 13 First Information Reports (FIRs) have been registered. One notable case involves a company named Beith Star, which imported solar panels worth Rs47 billion and subsequently sold them for Rs42 billion abroad. Additionally, other companies involved in this scam illegally transferred over Rs18 billion to different countries as payment for solar panels imported duty-free from China.
During the briefing, Sub-committee Convener Senator Mohsin Aziz underscored the clear evidence of money laundering and emphasized the gravity of the situation. He questioned how companies with minimal paid-up capital could conduct business worth billions, pointing out significant lapses in the banking verification process. Senator Aziz noted that banks showed negligence in opening accounts for these companies without proper verification.
The State Bank of Pakistan’s Deputy Governor addressed the committee, revealing that banks had been fined over Rs200 million for their involvement in the scandal. However, he clarified that banks were not aware of the quality and price of the imported goods, as this was the responsibility of the FBR.
Senator Mohsin Aziz directed the FBR to conduct a thorough investigation and submit a comprehensive report on the entire matter. Additionally, the State Bank of Pakistan has been instructed to submit its own report on the incident.
As the investigation progresses, the spotlight remains on the intricate details of this fraudulent scheme, shedding light on the critical need for stringent oversight and regulatory mechanisms in Pakistan’s import sector.