New Delhi: Three years after the Panama Papers brought down his political rivals, the Pakistani Prime Minister Imran Khan’s ministers, their families and political allies are part of more than 700 Pakistani names that feature in leaked financial data of offshore companies revealed in a major journalism investigation.
On Sunday, the International Consortium of Investigative Journalists (ICIJ) unveiled the Pandora Papers, a global investigation based on a leak of 11.9 million files from 14 companies that manage offshore transactions in tax havens ranging from the Cayman Islands to Switzerland.
The leaked financial data was shared with 150 news organisations worldwide, including The News, ICIJ’s Pakistani partner.
The investigations found that “key members of Khan’s inner circle, including cabinet ministers, their families and major financial backers” have stashed away millions of dollars in a maze of companies in offshore accounts. The list also included military leaders.
“The documents contain no suggestion that Khan himself owns offshore companies,” clarified the ICIJ report.
At the top of the list are Pakistan’s finance minister Shaukat Fayaz Ahmed Tarin, his family and the son of Khan’s former adviser for finance and revenue, Waqar Masood Khan. “The records also reveal the offshore dealings of a top PTI donor, Arif Naqvi, who is facing fraud charges in the United States.”
The revelations about Khan’s inner circle having offshore accounts could lead to a potential political firestorm in Pakistan. Three years ago, the presence of former Pakistani Prime Minister Nawaz Sharif and his family’s names in the ‘Panama Papers’ had been instrumental in the rise of Imran Khan to occupying the premier’s chair.
Immediately after the investigation reports were released on Sunday night, Imran Khan tweeted that he welcomed the “Pandora Papers exposing the ill-gotten wealth of elites, accumulated through tax evasion & corruption & laundered out to financial ‘havens’.” He added that his government will investigate all Pakistani citizens mentioned in the media investigations.
If unchecked, inequalities between rich & poor states will increase as poverty rises in the latter. This in turn will lead to a flood of economic migration from the poor to the rich states, causing further economic & social instability across the globe.
— Imran Khan (@ImranKhanPTI) October 3, 2021
According to ICIJ, Pakistani finance minister Shaukat Tarin and his family members own four offshore companies. The companies were set up as part of the Tarin family’s planned investment in a bank with a Saudi business, but the deal did not finally proceed.
In a statement, Tarin stated that the off-shore companies were “incorporated as part of the fund raising process for my Bank”.
Not just the current finance minister, but the former finance minister too found a mention in the Pandora Papers. “…former finance minister Ishaq Dar’s son, Ali Dar, Sindh’s former information minister Sharjeel Inam Memon and former chairman FBR and Secretary Finance Salman Siddiq’s son Yawar Salman owned companies in the tax havens,” the report noted.
The brother of Pakistan’s minister of industries transferred a $1 million apartment in Chelsea in London to his mother through an offshore company in 2018. The Pakistani anti-corruption agency is also investigation allegations that the Bhaktyar family’s wealth has increased inexorably since Makhdum Khusro Bakthyar first became minister in 2004. Bakhtyar has denied all allegations.
The son of Waqar Masood Khan, Imran Khan’s former chief adviser for finance and revenue, had co-owned an off-shore company based in the British Virgin Islands (BVI). Waqoor, who resigned in August, claimed that he was not aware of his son’s company.
Faisal Vawda, who resigned in March as minister for water resources due to a controversy over his dual citizenship, had set up an offshore company in 2012 to invest in UK properties. Vawda told ICIJ that he had declared all his assets to Pakistani tax authorities.
His successor at the ministry, Chaudhary Moonis Elahi, a member of coalition partner Muslim League-Q and scion of the powerful Chaudharys of Gujarat, also featured extensively in the leaked records.
Also read: Over 300 Indian Names in New Data Leak That Sheds Light on Offshore Dealings: Report
In January 2016, Elahi told officials of Asiaciti Trust, an offshore financial services provider, that he wanted to invest money from the 2007 sale of land owned by a family firm, Phalia Sugar Mills.
When Asiaciti asked him about his legal history, Elahi submitted a court document that cleared him of fraud charges. However, it was not related to the 2007 scandal of $608 million of unpaid loans to Bank of Punjab.
The Singapore-based firm denoted Elahi as a “politically exposed person” (PEP), which meant that the management had to green light all business with him and also establishe the source of his wealth.
“Asiaciti commissioned Thomson Reuters Risk Management Solutions,a unit of the financial information giant, to conduct an “enhanced due diligence” check. Thomson Reuters produced a 19-page report detailing allegations of Elahi’s involvement in “several corrupt land development projects,” including that he set up a fake company, fraudulently obtained loans and sold land at inflated prices to government agencies,” said the ICIJ report.
The Thomson Reuters report also pointed out that Bank of Punjab had filed a fraud complaint against the Elahi family.
Despite the report, Asiaciti accepted Moonis Elahi as a client in February 2016. Elahi provided Asiaciti with the contract from the sale of Phalia Sugar Mills as the source of the $33.7 million that he wanted to invest. “In other words, Elahi asked Asiaciti to invest the proceeds of an allegedly corrupt loan obtained from a state-owned bank.”
A spokesperson for Asiaciti told ICIJ said that the firm maintained a strong compliance programme, and that their offices have all passed audits for anti-money laundering and counter terrorism financing practices.
“However, no compliance program is infallible – and when an issue is identified, we take necessary steps with regard to the client engagement and make the appropriate notifications to regulatory agencies,” the spokesperson said.
They said that ICIJ’s reporting was based on incomplete information but declined to elaborate.
The leaked financial data also showed that when Asiaciti advised Elahi to tell Pakistani tax authorities about setting up a Singapore-based trust to invest in UK properties, he balked.
“‘Moonis,’ an Asiaciti manager wrote in a memo, ‘has concerns about the … reporting requirements.’ According to the memo, Elahi preferred to hold the investments in a UK-registered trust in his wife’s name; as a U.K. tax resident, she would not be subject to the same disclosure requirements.”
A family spokesman told ICIJ’s media partners that, “due to political victimisation misleading interpretations and data have been circulated in files for nefarious reasons.” He added that the family’s assets “are declared as per applicable law”.
After Elahi’s phone call with the Asiaciti, the Singapore-based trust was eliminated. The next year, Elahi’s wife used a UK shell company to transfer $8.2 million London apartment to Mahrukh Jahangir, who appears as a shareholder in RYK sugar mills which had always been the original target of investment.
In April this year, Pakistan’s Federal Investigation Agency announced a criminal probe into alleged price fixing by the sugar industry, with RYK sugar mills among the involved companies. Two months later, Elahi joined Imran Khan’s cabinet as minister for water resources.
One of the interesting revelations shows that the wife of a senior Pakistani army officer and former aide of President Pervez Musharraf got a $1.2 million apartment in London from the son of famous Indian film director through a discrete offshore transaction.
General Shafaat Ullah Shah’s wife was transferred the London property by an offshore company owned by Akbar Asif, who owns a multimillion dollar property portfolio. Asif is the son of Indian film director K. Asif, known for the epic Mughal-e-Azam.
The records show one of the offshore companies owned by Asif, Talah Ltd was used to transfer a London apartment near Canary Wharf financial district. Asif’s company, registered in the British Virgin Islands, bought the apartment in 2006. The next year, Asif transferred the ownership of the company to the Pakistani officer’s wife, Fariha Shah.
When contacted by ICIJ, the retired Pakistani general said that the purchase was through a former army colleague who was then acting as a consultant to London real estate firms and not due to any personal connection to Asif.
Shah said that he had briefly met Asif “in the corridors of Dorchester Hotel when he had accompanied the hairstylist, who had come to cut Mrs Musharraf’s hair”. Asif was keen to lobby for the release of his father’s film when Pakistan still had a long-standing ban on Indian films.
General Shah told ICIJ that the purchase of the London apartment had been made through a former army colleague then acting as a consultant to London real estate firms, not through any personal connection to Asif. General Shah said the flat “was named” to his wife because “I already had properties in my name while she did not have any and to balance tax deductions.”
In April 2006, Mughal-e-Azam became the first Indian film to be screened in Pakistan in over two decades. According to media reports at the time, President Musharraf had personally intervened to allow the screening of Mughal-e-Azam following an appeal from K. Asif’s son.
Incidentally, Asif’s sister was married to Iqbal Mirchi, a leading figure in Dawood Ibrahim’s D-company. India claims that Ibrahim had fled to the Pakistan, where he is being sheltered by the establishment.
This is not the only case in the massive leaked dataset related to Pakistani military officers, whose financial wealth has been kept assiduously away from the prying eyes of the media.
A former government minister and retired army officer, Raja Nadir Pervez, had transferred his shares in a BVI-registered company to a trust that controls several offshore firms.
“One of the trust’s beneficiaries is a British arms dealer. According to U.K. court documents, one of the trust’s other companies has helped broker arms sales from Belgian manufacturer FN Herstal SA to Hindustan Aeronautics Ltd., a state-owned Indian defense company.”
A member of the ruling party, Pervez did not respond to reporters’ questions.
A former ISI director general of counter-intelligence, Major General Nusrat Naeem, had registered a company, Afghan Oil and Gas Limited, in BVI after his retirement.
“Islamabad police later charged Naeem with fraud related to the attempted purchase of a steel mill for $1.7 million. The case was dropped,” observed the ICIJ report.
Besides, the new investigation found notable offshore holdings by close relatives of three senior military figures. “Taken together, the findings offer a portrait of an unaccountable military elite with extensive personal and family offshore holdings,” said the report.
In addition to political and military leaders, Pakistani media moguls too were on the leaked list of those owning offshore companies, The News reported. “The media owners who held offshore companies include publisher of Jang group Mir Shakil-ur-Rahman, CEO Dawn media group Hamid Haroon, Publisher of Express Media Group Sultan Ahmed Lakhani, the Gourmet Group which also owns a TV channel GNN and publisher of Pakistan Today the late Arif Nizami.”