Govt springs into action after Bahamas leaks

Finance minister promises no discrimination in investigation

ISLAMABAD: Breaking with its past practice of dilly-dallying on action against owners of offshore companies, the government on Thursday decided to serve tax notices on 144 Pakistani business executives named in a new trove of leaked documents.

The fresh leak of offshore files, the Bahamas Leaks, turns the spotlight on the archipelago nation and more than 175,000 companies registered there since 1990. Pakistanis own 68 such companies in the Caribbean islands.

The International Consortium of Investigative Journalists (ICIJ), which blew the lid off the use of international tax havens to hide wealth in a series of reports published earlier this year has posted a searchable database of companies tied to the world’s rich and powerful.



Finance Minister Ishaq Dar directed Federal Board of Revenue officials to “investigate” the matter and take “action” as per the “due process of law” against those individuals and companies named in the Bahamas Leaks, according to the finance ministry.

The meeting took place within 24 hours of the publication of the Bahamas Leaks, which was a clear departure from the government’s earlier policy of not moving against those politicians and influential people whose names had appeared in the Panama leaks.

The FBR has begun the process of sending tax notices under Section 176 of the Income Tax Ordinance-2001, FBR spokesman Dr Mohammad Iqbal told The Express Tribune. Section 176 empowers the FBR to seek information from people.

The government exercised the same powers to send notices to people named in the Panama leaks. The Securities and Exchange Commission of Pakistan has identified 444 such people but so far sent notices to only 221 people.

The businesses community is relatively weak than the political class. This probably is the reason the government has decided to serve notices on them within hours, PTI’s MNA Dr Arif Alvi, who has been a strong advocate of action against people named in the Panama leaks, said.

He said the government has done everything under the sun to protect people named in the Panama Papers and wield influence in the country.

Questions, however, have been raised over the government’s decision to invoke Section 176.



“The nature of tax notice does not fall under Section 176. The notices should have been served under Section 111 or Section 122 (5) of the Income Tax Law,” said Syed Shabbar Zaidi, senior partner at a leading chartered accountancy firm.

He said the scope of Section 176 was limited and deals with taxes imposed in Pakistan, adding that the information obtained through the notice is not limited to Pakistan.

“No discrimination against anyone should be made and the probe (in the Bahamas case) be started immediately keeping in view all the legal formalities,” said the finance minister.

The official handout noted that the finance minister has also given similar instructions to the SECP and the State Bank. The SECP has recently identified 444 persons whose names appeared in the Panama Papers. It has also excused from taking any action.

“The investments as mentioned in the Panama Papers were made by the persons in their individual capacity and the same has not been routed through the company’s accounts,” according to the SECP.

However, legal experts say the SECP’s stance that it cannot take any action against these people is not lawful. They said Section 101 of the Securities Act of 2015 binds every director to disclose his or her beneficial ownership and hiding such information would make them liable to punishment.

Bahamas leaks

According to the data compiled by Umer Cheema on behalf of the ICIJ about Pakistani business executives, some 144 Pakistani executives own as many as 68 companies in the Bahamas jurisdiction.



Among the companies are: Tabani Real Estate owned by Muhammad Saleem Zakaria, Muhammad Asif Zakaria, Muhammad Shafi, Muhammad Iqbal and Muhammad Qasim.

Green Crest Industries (ME) Ltd that was registered in 2010 by Sheikh Arshad Farooq, Amjad Farooq, Abid Farooq and Ahmed Amjad Farooq. Acro Voice (Middle East) Ltd owned by Muhammad Ali of Karachi. Harrow International Limited: its directors include Mohammad Siddique Fattah, Makhdoom Ali Sheikh, Mohammad Shoaib, Abbas Abdullah Khatri, Zehra Habib and Zahida Habib.

The Trans-Gulf Corporation, incorporated in September 2007 and among the directors/owners are: Sheikh Nadeem Zafar, Shafqat Rashid, Quaid Johar, Raheel Mazhar and Ahmed Sheikh.

Dr Tariq Mehmoood Chaudhry, Nur Banu Chaudhry and Ikramullah Chaudhry incorporated Sabina International Trading in August 2003.

Noor Arif Mukaty, Karachi, Abid Mohammad Mukaty and Naveed Mukaty incorporated Mukaty Holdings Ltd.

The Chapal World LLC incorporated in July 2005 by Muhammad Amin Chapal, Muhammad Hanif Chapal, Muhammad Rauf Chapal, Muhammad Ayub Chapal, Muhammad Jawad Chapal, and Muhammad Ahmed Chapal.

Muhammad Zakaria, Muhammad Irfan, Muhammad Saleem, Muhammad Qasim and Asad Qasim incorporated the Royale Global Trading LLC in August 2005.

The Le Club Williams Ltd was incorporated in April 2008 by Salim Mukaty, Hamida S. Mukaty, and Marzia Bawany.

The Tawakkal International LLC was incorporated in February 2007 by Muhammad Hanif Bumbia, Karachi, Rubina Hanif, Muhammad Owais Hanif.

Tianjin Pipe Corporation (Middle East) Ltd was incorporated by Abdullah Jan Sabari and Shahwez Akhtar Sabri of Bahawalpur. The Development Holdings Asia Ltd was incorporated in January 2013 by Khalid Mahmood from Karachi. The Luminant Holdings Ltd. was incorporated by Sheikh Shafqat Elahi, Sheikh Enam Elahi and Sheikh Shaukat Elahi, Lahore.



The Fusion Technologies was incorporated in October 2005 by Karim Jahani, Danus Kandawalla and Spenta Kandawalla, Karachi.

The Universe Investments was incorporated by Max Rudolf Wheeler Broda and Shaheena Malik Broda. The Linkage Developers LLC incorporated in March 2008 by Iqbal Rehmatullah, Karachi, Abdul Rauf Rehmatullah, Yasir Iqbal and Askari Asghar Agha.

Sarah Global Ventures LLC, registered in 2006 by Mohsin Abu Baker Sheikhani, Chairman ABAD Land developer and Sohail Mumtaz.

The Middle East Developers was registered in May 2006 by Asif Riaz, Karachi, and Gohar Ejaz, Lahore, Mohammed Saleem Admani, Mohammad Altaf Bilwani, and Muhammad Shafi.

The Chestnut Properties Inc was registered in September 2004 by Sohail Ahmed Nomani, Khalid Mahmood, and Naila Mahmood, DHA, Karachi. The Just Holdings Ltd, registered in Nov 2008 by Sohail Ahmed Nomani.

Tey Mill Cross Ltd, incorporated in 1997 by Ali Rizvi, Raazia Ajmal and Fatima Rizvi, Liaqat Bagh, Rawalpindi. The Sufa Limited, registered in May 1991 by Abdullah Jan Sabari and Shahwez Akhtar Sabri.

The Minerva Middle East Ltd, incorporated in 2004 by Khawar Mahmood, Model Town, Lahore, Shahzad Aziz Malik, Javed Ahmed and Izzat Majeed.

Brookes Corporation, incorporated in March 2005 by Naveed Hussain Lakhani, Karachi. Rockdale Equity LLC, registered in 2007 by Nadeem Khalid and Khalid Mahmood.

Barkat Holdings Ltd, incorporated in 1997 by Gohar Ullah, Hyderabad, Asad Barkat, Humayun Barkat. The Naffco International General Trading LLC, incorporated in January 2007 by Syed Muhammad Shibli, Fazl-e-Haq Road, Blue Area, Islamabad.

The Auriga Trading LLC incorporated in May 2004 by Muhamamd Usman, Muhammad Ikhlaq Memon, Masood Pervez. The Nick Edwards Ltd was incorporated in June 2008 by Nadeem Khalid, Karachi. Atwood Investments Ltd was incorporated by Mohamed Gibran Khan, Mohamed Zeeshan Khan and Mahvash Khan, Gulberg III, Lahore.

The Spectral Investment Management Ltd was incorporated in January 2015 by Ali Bilgrami, Islamabad 15A, Street 6, P&V Scheme No 2, Chak Shahzad Farms, Islamabad. The Paige Limited, incorporated in 2004 by Javed Ahmed and Izzat Majeed.

The Irfan Mowjee Foundation, incorporated in 2007 by Sultan Mowjee, Irshad Mowjee, Yasmin Mowjee, Farhana Mowjee, Karachi. The Emrazz Holdings Ltd, incorporated in 2003 by Sultan Mowjee, Irshad Mowjee, Yasmin Mowjee, Farhana Mowjee.

The Fairfax International Holdings Ltd was incorporated in January 2006 by Akram Mohyuddin Ghauri, DHA Lahore.

The Fortune Bay Investment Holdings Ltd, incorporated in May 2006 by Syed Muhammad Ali, Arsalan Memon Pirani, Muhammad Usman Pirani. The Emaan Trading Ltd, registered in 2004 by Ahmed Rateb Popal, Rashid Popal.

The Akida Islamic Bank International Ltd incorporated by Prof. Khurshid Ahmed of JI, Islamabad. Armani River Limited was incorporated by Samina Durrani in 2002. The Atlas Worldwide Holdings Ltd was incorporated in February 2012 by Khurram Zafar, Sheraz Waqar.

Published in The Express Tribune, September 23^rd, 2016.